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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 7, 1999JULY 10, 2003
REGISTRATION NO. 333-86199333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
NOTE EXCHANGE OFFER
ON---------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMKOR TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)(Exact name of registrant as specified in its charter)
DELAWARE 3674 23-1722724
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL(State or other jurisdiction of (Primary Standard Industrial (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)Employer
incorporation or organization) Classification Code Number) Identification No.)
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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KENNETH T. JOYCE
CHIEF FINANCIAL OFFICER
AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
(610) 431-9600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
DONNA M. PETKANICS, ESQ.
BRUCE M. MCNAMARA
ESQ.
THOMAS I. SAVAGE, ESQ.
LINDA Y. SUNG, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO,PERKINS COIE LLP
101 JEFFERSON DRIVE
MENLO PARK, CA 9430494025-1114
(650) 493-9300838-4300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.Statement becomes effective.
If any of the securities being registered on this Form are to bebeing offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THETHIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) OFFERING PRICE(2) FEE
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7.75% Senior Notes due 2013.................. $425,000,000 100% $425,000,000
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Total........................................ $425,000,000 $425,000,000 $34,382.50
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933.
(2) Equals the aggregate principal amount of the securities being registered.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER ORAND SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 7, 1999JULY 10, 2003
PRELIMINARY PROSPECTUS
AMKOR TECHNOLOGY, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING 9 1/4%7.75% SENIOR NOTES DUE MAY 1, 2006
FOR 9 1/4% SENIOR NOTES DUE MAY 1, 2006,
WHICH2013
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FOR ANY AND ALL OF ITS OUTSTANDING
10 1/2%7.75% SENIOR SUBORDINATED NOTES DUE MAY 1, 2009,
FOR 10 1/2% SENIOR SUBORDINATED NOTES DUE MAY 1, 2009,
WHICH HAVE BEEN REGISTERED2013
THAT WERE ISSUED AND SOLD IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
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Amkor Technology, Inc., a Delaware corporation, hereby offers to exchange,
upon the terms and conditions set forth in this prospectus and the accompanying
letter of transmittal, up to $425 million in aggregate principal amount of its
7.75% senior notes due 2013, which we refer to as the "exchange notes," for the
same principal amount of its outstanding 7.75% senior notes due 2013, which we
refer to as the "original notes."
The exchange offers will expire at 5:00 P.M., New York City time, on
January , 1999, unless we extend the deadline.
TERMS OF NEW SENIOR NOTES
- - MATURITY: The new Senior Notes will mature on May 1, 2006.
- - INTEREST PAYMENTS: Interest will be payable in cash in arrears semi-annually
on May 1 and November 1 of each year, commencing on November 1, 1999.
- - RANKING: The new Senior Notes will be our unsecured senior debt and rank
equally with all of our existing and future unsecured senior debt and rank
senior to all of our existing and future debt that expressly provides that it
is subordinated to the new Senior Notes, including the Senior Subordinated
Notes and our 5 3/4% Convertible Subordinated Notes due 2003. The new Senior
Notes will be effectively subordinated to all of our existing and future
secured debt, if any, to the extent of such security and to all existing and
future debt and other liabilities of our subsidiaries.
- - REDEMPTION: At any time, we may redeem some or allterms of the new Senior Notes at
redemption prices and on terms specified herein.
- - MANDATORY OFFER TO REPURCHASE: If we sell certain assets or experience
specific kinds of changes of control, we must offerexchange notes are substantially identical to repurchase the new
Senior Notes at the prices and on the terms specified herein.
INVESTING IN THE NOTES INVOLVES RISKS.
SEE "RISK FACTORS" ON PAGE 12.
TERMS OF NEW SENIOR SUBORDINATED NOTES
- -MATURITY: The new Senior Subordinated Notes will mature on May 1, 2009.
- - INTEREST PAYMENTS: Interest will be payable in cash in arrears semi-annually
on May 1 and November 1 of each year, commencing on November 1, 1999.
- - RANKING: The new Senior Subordinated Notes will be our unsecured senior
subordinated debt and rank junior in right of payment to all of our existing
and future debt (other than our trade payables and our 5 3/4% Convertible
Subordinated Notes due 2003), including the Senior Notes, unless the terms of
that debt expressly provide that it ranks equal with, or is subordinated in
right of payment to the new Senior Subordinated Notes. The new Senior
Subordinated Notes will rank senior in right of payment to our 5 3/4%
Convertible Subordinated Notes due 2003.
- - REDEMPTION: At any time prior to May 1, 2002, we may redeem up to 35% of the
new Senior Subordinated Notes with the cash proceeds of offerings of our
common stock at redemption prices and on terms specified herein. On or after
May 1, 2004, we may redeem some or all of the new Senior Subordinated Notes at
redemption prices and on terms specified herein.
- - MANDATORY OFFER TO REPURCHASE: If we sell certain assets or experience
specific kinds of changes of control, we must offer to repurchase the new
Senior Subordinated Notes at the prices and on the terms specified herein.
TERMS OF THE EXCHANGE OFFERS
- - We will exchange all old Notesoriginal notes, except that are validly tendered and not withdrawn
prior to the expiration of the exchange offers.
- - Wenotes will generally be freely
transferable and do not receive any proceeds from the exchange offers.
- -contain certain terms with respect to liquidated
damages. We will issue the new Notes promptly afterexchange notes under the expirationIndenture governing the
original notes. For a description of the principal terms of the exchange offers.
- - You may withdraw tendersnotes,
see "Description of original Notes atthe Notes."
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON
, 2003, UNLESS WE EXTEND THE OFFER. At any time prior to the
expiration date, you may withdraw your tender of any original notes; otherwise,
such tender is irrevocable. We will receive no cash proceeds from the exchange
offer.
The exchange notes constitute a new issue of securities for which there is
no established trading market. Any original notes not tendered and accepted in
the exchange offer will remain outstanding. To the extent original notes are
tendered and accepted in the exchange offer, your ability to sell untendered,
and tendered but unaccepted, original notes could be adversely affected.
Following consummation of the exchange offers.
- -offer, the original notes will continue
to be subject to their existing transfer restrictions and we will have no
further obligations to provide for the registration of the original notes under
the Securities Act of 1933, as amended (the "Securities Act"). We believecannot
guarantee that an active trading market will develop or give assurances as to
the liquidity of the trading market for either the original notes or the
exchange notes.
This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of old Notes will not beexchange notes
received for original notes that were acquired by such broker-dealer for its own
account as a taxable event for
federal income tax purposes, but you should see "Federal Income Tax
Considerations" on page 81 for more information.
WE ARE MAILING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL ON DECEMBER ,
1999.
Neitherresult of market-making activities or other trading activities. If
any holder of the original notes notifies us prior to the 20th business day
following the consummation of the exchange offer that it is prohibited by law or
policy of the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of(the "SEC") from participating
in the new Notes or determinedexchange offer, that it may not resell the exchange notes acquired by it
in the exchange offer to the public without delivering a prospectus, and this
prospectus is truthfulnot appropriate or complete. Any representation to the contraryavailable for such resales by it, or that it is
a criminal offense.broker-dealer and holds original notes acquired directly from us or our
affiliates, we will use commercially reasonable efforts to file with the SEC a
shelf registration statement to register for public resale the original notes
held by any such holder who provides us with certain information for inclusion
in the shelf registration statement, such shelf registration statement to be
effective by the SEC on or prior to 120 days after such obligation to file a
shelf registration statement arises.
INVESTING IN THE EXCHANGE NOTES INVOLVES CERTAIN RISKS. PLEASE READ "RISK
FACTORS" BEGINNING ON PAGE 9 OF THIS PROSPECTUS.
This prospectus and the letter of transmittal are first being mailed to all
holders of the original notes on , 2003.
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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is December , 19992003.
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TABLE OF CONTENTS
PAGE
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Available Information............................ ii
Documents Incorporated by Reference.............. ii
Disclosure Regarding Forward-Looking
Statements..................................... iii
Use of Certain Terms............................. iii
Prospectus Summary............................... 1
Risk Factors..................................... 12
Use of Proceeds.................................. 16
Our Indebtedness and Financing Agreements........ 16
PAGE
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The Exchange Offers.............................. 17
Description of the Notes......................... 25
Additional Terms of the New Notes................ 82
Federal Income Tax Consideration................. 82
Plan of Distribution............................. 83
Legal Matters.................................... 83
Experts.......................................... 84
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THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIALFORWARD-LOOKING INFORMATION
ABOUT US THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THISThis prospectus and the documents incorporated by reference in this
prospectus contain forward-looking statements within the meaning of the federal
securities laws, including but not limited to statements regarding: (1) the
condition and growth of the industry in which we operate, including trends
toward increased outsourcing, reductions in inventory and demand and selling
prices for our services, (2) our anticipated capital expenditures and financing
needs, (3) our belief as to our future capacity utilization rates, revenue,
gross margins and operating performance and (4) other statements that are not
historical facts. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or the negative of
these terms or other comparable terminology. Because such statements include
risks and uncertainties, actual results may differ materially from those
anticipated in such forward-looking statements as a result of certain factors,
including those set forth in our Quarterly Report on Form 10-Q filed on May 9,
2003 under the heading "Risk Factors that May Affect Future Operating
Performance." You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus
or, as applicable, as of the date of any such document incorporated by reference
herein. Moreover, in the future, we may make forward-looking statements about
the matters described in this prospectus or about other matters concerning us.
WHERE YOU CAN FIND MORE INFORMATION
IS AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST FROM:
AMKOR TECHNOLOGY, INC.
1345 ENTERPRISE DRIVE
WEST CHESTER, PA 19380
ATTN: KEVIN HERON, ESQ.
PHONE: (610) 431-9600
In order to ensure timely delivery of documents,We file annual, quarterly and special reports, prospectuses and other
information with the SEC. You may read and copy any requestreports, statements or other
information that we file at the SEC's public reference rooms at 450 Fifth
Street, N.W., Washington, D.C. 20549, 7 World Trade Center, Suite 1300, New
York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for documents
should be made no later than five (5) business days priormore
information on the public reference rooms. These SEC filings are also available
to the expiration date
ofpublic from commercial document retrieval services and at the exchange offer.
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AVAILABLE INFORMATION
We haveInternet
world wide web site maintained by the SEC at www.sec.gov.
On , 2003, we filed with the Securities and Exchange CommissionSEC a registration statement on Form
S-4 coveringunder the new Notes to be issued in the exchange
offers.Securities Act, of which this prospectus is a part. This
prospectus does not contain all of the information included in the registration statement.
Statements containedWe have omitted parts of the registration statement, as permitted by the rules
and regulations of the SEC. You may inspect and copy the registration statement,
including exhibits, at the SEC's public reference facilities or its web site.
Our statements in this prospectus concerningabout the provisionscontents of any contract or other
document are not necessarily complete. You should refer to the copy of these documentseach
contract or other document we have filed as an exhibit to the registration
statement or
otherwisefor complete information.
The SEC allows us to "incorporate by reference" into this prospectus the
information that we file with the SEC. This means that we can disclose important
information to you by referring you to those documents. The information we
incorporate by reference is considered a part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below, all
filings filed by us with the SEC for a more complete understanding of the
matter involved. Each statement concerning these documents is qualified in its
entirety by referencepursuant to the copy of the document filed by us with the SEC.
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the date of the initial registration statement and
in accordanceprior to effectiveness of the registration statement, and any future filings
that we make with the requirementsSEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act we file reports and other information withuntil the SEC. You may read and, for a
fee, copy any document that we file with the SEC: (1) at the public reference
facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, (2) at the regional office of the SEC
located at Seven World Trade Center, 13th Floor, New York, New York 10048 or (3)
at the regional office of the SEC located at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these
documents may also be obtained at prescribed rates from the Public Reference
Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain
the documents that we file electronically from the SEC's web site at
http://www.sec.gov. Information concerning usexchange offer is also available for inspection
at the offices of the Nasdaq National Market, Reports Section, 1735 K Street,
N.W., Washington, D.C. 20006.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the SEC by us pursuant to the Exchange
Act are incorporated by reference in this prospectus:
1.completed:
- Our Annual Report on Form 10-K10-K/A for the fiscal year ended December 31, 1998,2003,
filed with the SEC on March 31, 1999, the amendment thereto filed with
the SEC on April 30, 1999 and the amendment thereto filed with the SEC on
May 20, 1999; (Note with respect to dissolution of Chong Un & Company: The
Company had an investment in Anam Semiconductor, Inc. ("ASI") as of December
31, 1997 and for the years ended December 31, 1996 and 1997. The Company
sold its investment in ASI on February 16, 1998. ASI had a consolidated
subsidiary, Anam Engineering and Construction Co., Ltd., that was audited by
Chong Un & Company ("Chong Un"). A copy of the Chong Un 1997 audit report is
included in the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998. The Company has been advised that Chong Un has been
dissolved and has ceased to perform accounting and auditing services. Chong
Un has not been and will not be available to perform any subsequent review
procedures with respect to its report. Further, as a result of its status,
Chong Un has not consented to the incorporation by reference of its report
into this registration statement. The Company has been advised that the
terms of Chong Un's dissolution require the preservation of its reserves in
escrow for claims of damages for the next three years and there is no
provision to distribute the firm's liquidation assets among its members. The
Company understands that judgments, if any, awarded in the US or Korea to
ATI investors rendered against Chong Un may be considered as a claim of
damages provided that the claim is appropriate under Korean law. The
discussion regarding certain effects of the Chong Un dissolution as set
forth in this registration statement is not meant and should not be
construed in any way as legal advice to any party and any potential
purchaser of the Company's securities should consult with his or her own
counsel with respect to the effect of the Chong Un dissolution on a
potential purchase of the Company's securities or otherwise.)
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2.June 25, 2003;
- Our Quarterly ReportsReport on Form 10-Q for the quarter ended March 31, 1999,2003,
filed with the SEC on May 17, 1999, the quarter ended June 30, 1999,9, 2003; and
- Our Current Reports on Form 8-K and Form 8-K/A filed with the SEC on
August 16, 1999January 31, April 23, April 29 and forMay 21, 2003.
You can obtain any of the quarter ended September
30, 1999, filed withdocuments incorporated by reference through us,
the SEC on November 15, 1999; and
3. Our Current Report on Form 8-K, filed withor the SEC on April 26, 1999,
and the amendmentsSEC's Internet world wide web site as described above. Documents
incorporated by reference are available from us
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without charge, excluding exhibits thereto filed on Form 8-K/A on June 1, 1999 and August 2,
1999, our Current Report on Form 8-K filed on June 11, 1999, our current
Report on Form 8-K filed on August 6, 1999, our Current Report on Form 8-K,
filed on November 12, 1999, and the amendment thereto filed on Form 8-K/A on
December 7, 1999, and our Current Report on Form 8-K, filed on November 30,
1999.
All documents filedunless we have specifically
incorporated by us with the SEC pursuantreference such exhibits in this prospectus. Any person,
including any beneficial owner, to Sections 13(a) and (c),
14, or 15(d) of the Exchange Act after the date ofwhom this prospectus and prior to
the termination of the offering of the new Notes offered pursuant to this
prospectus shall be deemed to beis delivered may obtain
documents incorporated by reference in, but not delivered with, this prospectus
andby requesting them by telephone or in writing at the following address:
Amkor Technology, Inc.
1345 Enterprise Drive
West Chester, PA 19380
(610) 431-9600
Attn: Corporate Secretary
TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THESE DOCUMENTS NO LATER THAN
FIVE BUSINESS DAYS BEFORE YOU MAKE YOUR INVESTMENT DECISION.
Copies of the documents listed above are also available free of charge
though our website (www.amkor.com) as soon as reasonably practicable after we
electronically file the material with, or furnish it to, be a part of this prospectus from the date when we file such documents.
Any statement contained in a document incorporated or deemed to beSEC.
You should rely only on the information incorporated by reference in this prospectus shall be deemed to be modified or
superseded for
purposes of this prospectus to the extent that a statement containedprovided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with information different from that contained in
this prospectus. We are offering to exchange original notes for exchange notes
only in jurisdictions where such offer is permitted. You should not assume that
the information in the incorporated documents, this prospectus or any prospectus
supplement is accurate as of any other subsequently filed document which also is or is
deemeddate other than the date on the front of
these documents.
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2
PROSPECTUS SUMMARY
This summary may not contain all the information that may be important to
be incorporated by reference in this prospectus modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
As used herein,you. You should read the term "prospectus" mean thisentire prospectus, including the additional documents
or portions incorporated or deemed to be incorporated inwhich we refer you, before making an investment decision. See "Where You Can
Find More Information." In this prospectus, by reference, as the same may be amended, supplemented orunless otherwise modified from time to time. Statements contained in this prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of a
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of the contract or other document.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. You may find these statements under the sections entitled
"Summary" or "Risk Factors,noted, "we," or by the use of forward-looking terminology such
as "believe," "expect," "anticipate," "estimate," "plan," "project," "may,"
"will" or other similar words. We have based these forward-looking statements on
our own information and on information from other sources that we believe are
reliable. Our actual results may differ materially from those expressed or
implied by these forward-looking statements as a result of risk factors and
other factors noted throughout this prospectus. Given this level of uncertainty,
you should not place undue reliance on such forward-looking statements.
USE OF CERTAIN TERMS
All references in this prospectus to "Amkor," "we,"our,"
"us," "our" or the
"company" areand "Amkor" refer to Amkor Technology, Inc. and its consolidated
subsidiaries. We refer to the
acquisition of the Kwangju Packaging Business ("K4"), a semiconductor packaging
and test factory, from Anam Semiconductor, Inc. ("ASI") as the "Acquisition." We
refer collectively to the Acquisition and the offering of the old Notes as the
"Transaction." We refer to the first $41.6 million installment of our equity
investment in ASI as the "Investment." We refer to the Republic of Korea, which
is also commonly known as South Korea, as "Korea." References to "won" or W are
to the currency of Korea. We collectively refer to the old and new Senior Notes
as the "Senior Notes" and collectively refer to the old and new Senior
Subordinated Notes as the "Senior Subordinated Notes." We collectively refer to
the new Senior Notes and the new Senior Subordinated Notes as the "new Notes"
and to the old Senior Notes and old Senior Subordinated Notes as the "old
Notes." We collectively refer to the Senior Notes Indenture and the Senior
Subordinated Notes Indenture as the "Indentures." We define "EBITDA" in footnote
(d) on page 10.
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. You should
read this prospectus in its entirety for specific terms of the new Notes that we
are offering in exchange for the old Notes.
AMKOR TECHNOLOGY, INC.
Amkor isWe are the world's largest independent providersubcontractor of semiconductor packaging and
test services. We believe that we are also one of thewere incorporated in Delaware in 1997. The company has built a
leading developers of
advanced semiconductor packaging and test technology. We offerposition by:
- Providing a broad and
integrated setportfolio of packaging and test services, which aretechnologies and
services;
- Maintaining a leading role in the final procedures to
prepare semiconductor devices for further use. Our customers supply usdesign and development of new package
and test technologies;
- Cultivating long-standing relationships with
semiconductor wafers, and through a series of complex steps we incorporate
individual semiconductor chips into protective packages that facilitate the
integration of the semiconductor devices into electronic products. We also
provide final testing and related services that validate the operating
specifications of the finished semiconductor device. In January 1998, we began
marketing wafer fabrication services provided by ASI's new semiconductor wafer
foundry. We have more than 150 customers, including many of
the world's largestleading semiconductor companies, who purchased more than 3 billion packaged
semiconductor devices from uscompanies;
- Developing expertise in 1998.high-volume manufacturing; and
- Diversifying our operational scope by establishing production
capabilities in China, Japan and Taiwan, in addition to long-standing
capabilities in Korea and the Philippines.
The semiconductors that we package and test for our customers ultimately
become components in electric systems used in communications, computing,
consumer, industrial, automotive and military applications. Our customers
include, among others, Advanced Micro Devices, Inc.,Agilent Technologies, Atmel Corporation, Intel
Corporation, International Business Machines
Corp., Lucent Technologies,LSI Logic Corporation, Mediatek Inc., Motorola, Inc., National Semiconductor Corp., Philips Electronics N.V.,
SGS-THOMSONR.F. Microdevices, ST Microelectronics N.V., Siemens AGPTE, Sony Semiconductor Corporation and
Texas Instruments, Inc.
We provideToshiba Corporation. The outsourced semiconductor packaging and test services through our three factories inmarket is
very competitive. We also compete with the Philippines. We source additionalinternal semiconductor packaging and
test services from three
factories located in Koreacapabilities of many of our customers.
Packaging and owned by ASI, pursuanttest are an integral part of the semiconductor manufacturing
process. Semiconductor manufacturing begins with silicon wafers and involves the
fabrication of electronic circuitry into complex patterns, thus creating
individual chips on the wafers. The packaging process creates an electrical
interconnect between the semiconductor chip and the system board. In packaging,
the fabricated semiconductor wafers are cut into individual chips which are then
attached to a supply agreementsubstrate and encased in a protective material to provide optimal
electrical and thermal performance. Increasingly, packages are custom designed
for specific chips and specific end-market applications. The packaged chips are
then tested using sophisticated equipment to ensure that each packaged chip
meets its design specifications.
We historically marketed the output of fabricated semiconductor wafers
provided by a wafer fabrication foundry owned and operated by Anam
Semiconductor, Inc. (ASI). On February 28, 2003, we sold our wafer fabrication
services business to ASIand restated our historical results to reflect our wafer
fabrication services segment as a discontinued operation.
3
SUMMARY OF THE EXCHANGE OFFER
In May 2003, we completed a private offering of the original notes. We
received aggregate net proceeds, before expenses and commissions, of $425
million from the sale of the original notes.
In connection with
ASI. We used the proceeds of the offering of original notes, we entered into a
Registration Rights Agreement with the old Notes to acquire
substantially allinitial purchasers of the assetsoriginal notes
in which we agreed to use commercially reasonable efforts to deliver to you this
prospectus and to commence the exchange offer for the original notes within 210
days of K4. K4 provides packagingtheir issuance. In the exchange offer, you are entitled to exchange your
original notes for exchange notes, with substantially identical terms as the
original notes. The exchange notes will be accepted for clearance through The
Depository Trust Company ("DTC") and test services
for advanced leadframeClearstream Banking SA ("Clearstream") or
Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"),
with a new CUSIP and laminate packages that are used in high-performance
electronic products such as cellular telephones, laptop computers, digital
camerasISIN number and microprocessors. Opened in October 1996, K4 has been ramping up
production throughout 1997 and 1998 and provides us with significant
opportunities for capacity expansion as demand for advanced packages grows. Forcommon code. You should read the year ended December 31, 1998, we had $1,568.0 million in net revenues and
$241.3 million in EBITDA. Assuming the Acquisition had occurred on January 1,
1998, our EBITDA would have been $289.1 million. However, our net revenues for
1998 would have been substantially the same because during 1998 we sold
substantially all of K4's services under a supply agreement with ASI.
We have a long-standing relationship with ASI. For the year ended December
31, 1998, we derived 69% of our net revenues and 49% of our gross profit from
sales of services performed for us by ASI. Assuming the Acquisition had occurred
on January 1, 1998, these figures would have declined to 56% of our net revenues
and 40% of our gross profit. In addition, ASI derives nearly all of its revenues
from services sold to us. Mr. James Kim, our Chairman and Chief Executive
Officer, serves as Chairman and as a Director of ASI, and he and other members
of his family beneficially owned approximately 36.4% of ASI's outstanding common
stock as of July 31, 1999. We expect ASI to continue to be important to our
business. ASI has experienced financial difficulties and recently ASI and its
creditors have agreed on a workout arrangement. In April, 1999 we committed to
make an equity investment in ASI in installments of $41 million in each of 1999,
2000 and 2001 and $27 million in 2002, and in October 1999 we consummated the
first installment of this commitment. Our commitment to invest in ASI is subject
to: (1) execution of a definitive stock purchase agreement, (2) concurrent
conversion of debt by the creditor financial institutions, (3) the workout
remaining in effect and (4) the supply agreements between our company and ASI
remaining in effect.
Our principal executive offices are located at 1345 Enterprise Drive, West
Chester, PA 19380, and our telephone number at that address is (610) 431-9600.
1
7
THE EXCHANGE OFFERS
Old Notes..................... On May 13, 1999, we completed the offering of
$425,000,000 aggregate principal amount of our
9 1/4% Senior Notes due 2006 and $200,000,000
aggregate principal amount of our 10 1/2%
Senior Subordinated Notes due 2009 to SG Cowen
Securities Corporation, Salomon Smith Barney
Inc., BT Alex. Brown Incorporated, NationsBanc
Montgomery Securities LLC, BancBoston Robertson
Stephens Inc. and Prudential Securities
Incorporated, as initial purchasers. The
initial purchasers sold the old Notes to
"qualified institutional buyers" as defined in
Rule 144Adiscussion
under the Securities Actheading "Description of 1933. We
have filed the registration statement of which
this prospectusNotes" beginning on page for more
information about the exchange notes. After the exchange offer is a partcompleted, you
will no longer be entitled to complyany exchange or, with alimited exceptions,
registration rights agreement between us and
the initial purchasers.for your original notes.
The Exchange Offers...............Offer............ We are offering to exchange the old Senior
Notes for new Senior Notes in the aggregateup to $425 million
principal amount of the exchange notes for up
to $425,000,000 provided
that the old Senior Notes are properly tendered
and accepted for exchange. We are also offering
to exchange the old Senior Subordinated Notes
for new Senior Subordinated Notes in the
aggregate$425 million principal amount of up to
$200,000,000 provided that the
old Senior
Subordinated Notes are properly tendered and
accepted for exchange. We will issue the new
Notes promptly after the expirationoriginal notes. Original notes may only be
exchanged in $1,000 increments.
The terms of the exchange offers. If younotes are not prohibited from
participatingidentical
in all material respects to those of the
original notes except the exchange offersnotes will
not be subject to transfer restrictions and
you do
not tender your old Notes prior to the
completionholders of the exchange offers, younotes, with limited
exceptions, will have no furtherregistration rights.
Also, the exchange rights undernotes will not include
provisions contained in the original notes that
required payment of liquidated damages in the
event we failed to satisfy our registration
rights agreements. Accordingly,
any old Notesobligations with respect to the original notes.
Original notes that are not tendered for
exchange will continue to be subject to
transfer restrictions and, with limited
exceptions, will not have registration rights.
Therefore, the market for secondary resales of
original notes that are not tendered for
exchange is likely to be minimal.
We will issue registered exchange notes on transfer. See "Risk
Factors -- Consequencesor
promptly after the expiration of Not Tendering Old
Notes."the exchange
offer.
Expiration Date............... The exchange offersoffer will expire at 5:00 p.m., New
York City time, on January , 1999,2003, unless we
decide to extend the expiration date. Please
read "The Exchange Offer -- Extensions, Delay
in Acceptance, Termination or Amendment" on
a later extended date andpage 15 for more information about extending
the expiration date.
Withdrawal of Tenders......... You may withdraw your tender of original notes
at any time as we may
decide.prior to the expiration date. We
will return to you, without charge, promptly
after the expiration or termination of the
exchange offer any original notes that you
tendered but that were not accepted for
exchange.
Conditions to the Exchange
Offers........................ TheOffer......................... We will not be required to accept original
notes for exchange:
- if the exchange offers are subject to certain
customary conditions. The conditions are
limited and relate in general to proceedingsoffer would be unlawful or
lawswould violate any interpretation of the SEC
staff, or
- if any legal action has been instituted or
threatened that mightwould impair our ability to
proceed with the exchange offers. Asoffer.
4
The exchange offer is not conditioned on any
minimum aggregate principal amount of the date of
this prospectus, none of these events had
occurred, and we believe their occurrence to be
unlikely. If any such conditions do exist priororiginal
notes being tendered. Please read "The Exchange
Offer -- Conditions to the expiration date, we may takeExchange Offer" on
page 16 for more information about the
following actions:
- refuseconditions to accept any old Notes and return all
previously tendered old Notes;
- extend the duration of the exchange offers;
or
- waive such conditions.offer.
Procedures for Tendering
Old
Notes.........................Original Notes................ If your original notes are held through DTC and
you wish to participate in the exchange offers,offer,
you must complete, sign and datemay do so through DTC's automated tender
offer program. If you tender under this
program, you will agree to be bound by the
letter of transmittal and send it, togetherthat we are providing
with your old Notes to be exchanged and any
other
2
8
required documentation to State Street Bank and
Trust Company,this prospectus as exchange agent, at the
address set forth inthough you had signed
the letter of transmittal. Brokers, dealers, commercial banks, trust
companies andBy signing or
agreeing to be bound by the letter of
transmittal, you will represent to us that,
among other nominees may tender old
Notes which they hold as nominee by book-entry
transfer. Questions regardingthings:
- any exchange notes that you receive will be
acquired in the tenderordinary course of your
business,
- you have no arrangement or understanding with
any person to participate in the distribution
of the old Notesoriginal notes or the exchange offer, generally,
must be directednotes,
- you are not our "affiliate," as defined in
Rule 405 under the Securities Act, or, if you
are our affiliate, you will comply with any
applicable registration and prospectus
delivery requirements of the Securities Act,
- if you are not a broker-dealer, you are not
engaged in and do not intend to engage in the
distribution of the exchange agent.notes, and
- if you are a broker-dealer that will receive
exchange notes for your own account in
exchange for original notes that you acquired
as a result of market-making activities or
other trading activities, you will deliver a
prospectus in connection with any resale of
such exchange notes.
Special Procedures for
Beneficial Owners.........Owner.............. If you are theown a beneficial owner of old Notes
whichinterest in original
notes that are registered in the name of a
broker, dealer, commercial bank, trust company
or other nominee and you wish to tender the
old Notesoriginal notes in the exchange offers, you shouldoffer, please
contact suchthe registered holder promptlyas soon as
possible and instruct suchthe registered holder to
tender the old Notes on your behalf. If you wishbehalf and to tender on your own
behalf, you must, prior to completing and
executing the letter of transmittal and
delivering the old Notes, either make
appropriate arrangements to register ownership
of the old Notescomply with our
instructions described in your own name or obtain a
properly completed bond power from the
registered holder. The transfer of registered
ownership may take considerable time and it may
not be possible to complete prior to the
expiration date.this prospectus.
Guaranteed Delivery
Procedures.................... IfYou must tender your original notes according
to the guaranteed delivery procedures described
in "The Exchange Offer -- Guaranteed Delivery
Procedures" on page 19 if any of the following
apply:
- you wish to tender your old Notes and your
old Notesoriginal notes but
they are not immediately available,
or- you cannot deliver your old Notes,original notes, the
letter of transmittal or any other documents required
by
the letter of transmittaldocuments to the exchange agent or you cannot complete the procedure for
book-entry transfer, then prior to the
expiration date, or
- you must tender your old Notes
according to the guaranteed delivery procedures
set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures."
Withdrawal Rights............. Tenders of old Notes may be withdrawn at any
time before 5:00 p.m., New York City time, on
the expiration date by delivering a written
notice of such withdrawal to the exchange agent
in conformitycannot comply with the applicable
procedures set forth
under "The Exchange Offer -- Withdrawal of
Tenders."
Acceptance of Old Notes and
Delivery of New Notes......... SubjectDTC's automated tender offer
program prior to the satisfaction or waiver of the
conditions of the exchange offers, we will
accept for exchange any and all old Notes that
are properly tendered in the exchange offers
before 5:00 p.m., New York City time, on the expiration date.
We will deliver the new Notes
promptly following the expiration date. If5
Resales....................... Except as indicated herein, we do not accept any of your old Notes for
exchange, we will return them to you as
promptly as practicable after the expiration or
termination ofbelieve that the
exchange offernotes may be offered for resale,
resold and otherwise transferred without any
expense to you.
Certain Tax Considerations.... The exchange pursuant to the exchange offers
should not result in the recognition of income,
gain or loss to you or to us for federal income
tax purposes. See "Federal Income Tax
Consideration" for a discussion of the material
federal income tax consequences of the exchange
offers.
3
9
Exchange Agent................ State Street Bank and Trust Company, the
trustee under the Indentures, is serving as
exchange agent in connection with the exchange
offers.
CONSEQUENCES OF NOT EXCHANGING OLD NOTES
If you do not exchange your old Notes for new Notes, you will be unable to
offer, sell or otherwise transfer your old Notes except:
- in
compliance with the registration and prospectus
delivery requirements of the Securities Act,
and
any other applicable securities laws; orprovided that:
- pursuant to an exemption therefrom; oryou are acquiring the exchange notes in the
ordinary course of your business;
- in a transactionyou are not subject to such securities laws.
Old Notes that youparticipating, do not exchange for new Notesintend to
participate and have no arrangement or
understanding with any person to participate
in the exchange offers will
continue to bear a legend reflecting such restrictions on transfer. In addition,
upon consummationdistribution of the exchange offers,notes;
and
- you willare not be entitledan affiliate of Amkor.
Our belief is based on existing interpretations
of the Securities Act by the SEC staff set
forth in several no-action letters to third
parties. We do not intend to seek our own
no-action letter, and there is no assurance
that the SEC staff would make a similar
determination with respect to the exchange
notes. If this interpretation is inapplicable,
and you transfer any rights
to have old Notes registeredexchange note without
delivering a prospectus meeting the
requirements of the Securities Act or without
an exemption from such requirements, you may
incur liability under the Securities Act. We do
not intendassume, or indemnify holders against, such
liability.
Each broker-dealer that is issued exchange
notes for its own account in exchange for
original notes that were acquired by such
broker-dealer as a result of market-making
activities or other trading activities must
acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act
in connection with any resale of the exchange
notes. To the extent described in "Plan of
Distribution" beginning on page 61, a
broker-dealer may use this prospectus for an
offer to registerresell, resale or other retransfer of
the exchange notes.
United States Federal Income
Tax Considerations............ The exchange of original notes for exchange
notes will not be a taxable exchange for United
States federal income tax purposes. Please read
"United States Federal Income Tax
Considerations" on page .
Use of Proceeds............... We will not receive any proceeds from the
issuance of the exchange notes pursuant to the
exchange offer. Except as described in "The
Exchange Offer -- Transfer Taxes," we will pay
certain expenses incident to the exchange
offer.
Registration Rights........... If we fail to complete the exchange offer as
required by the Registration Rights Agreement,
we may be obligated to pay additional interest
to holders of the original notes. Please read
"Description of the Notes -- Registration
Rights; Liquidated Damages" beginning on page
39 for more information regarding your rights
as a holder of the original notes.
6
THE EXCHANGE AGENT
We have appointed U.S. Bank National Association as exchange agent for the
exchange offer. Please direct questions and requests for assistance, requests
for additional copies of this prospectus or of the letter of transmittal and
requests for the notice of guaranteed delivery to the exchange agent. If you are
not tendering under DTC's automated tender offer program, you should send the
letter of transmittal and any other required documents to the exchange agent as
follows:
U.S. BANK NATIONAL ASSOCIATION
By Mail (Registered or By Facsimile Transmission
Certified (Eligible Institutions Only):
Mail Recommended) or Courier:
U.S. Bank National Association (651) 244-1537 Confirm by Telephone:
Corporate Trust Services Attention: Specialized Finance (651) 244-1197
180 East Fifth Street
St. Paul, MN 55101
Attention: Specialized Finance
THE EXCHANGE NOTES
The form and terms of the exchange notes to be issued in the exchange offer
are the same as the form and terms of the original notes, except that the
exchange notes will be registered under the Securities Act any old Notes that remain outstanding after
completion ofand, therefore, will
not bear legends restricting their transfer, will not contain terms providing
for liquidated damages if we fail to perform our registration obligations with
respect to the exchange offers (subject tooriginal notes and, with limited exceptions, if
applicable).
To the extent that old Notes are tendered and accepted in the exchange
offers, any trading market for old Notes that remain outstanding after the
exchange offers couldwill not be adversely affected. See "Risk Factors -- Consequences
of Not Tendering Old Notes."
The new Senior Notes and any old Senior Notes that remain outstanding after
consummation of the exchange offers will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding principal amount thereof have taken certain actions or exercised
certainentitled
to registration rights under the indenture.Securities Act. The new Senior Subordinated Notes and any
old Senior Subordinated Notes that remain outstanding after consummation of the
exchange offers will vote together as a single class for purposes of determining
whether holders of the requisite percentage in outstanding principal amount
thereof have taken certain actions or exercised certain rights under the
indenture.
TERMS OF NEW SENIOR NOTES
One offer applies to up to $425,000,000 aggregate principal amount of our
old Senior Notes. The new Senior Notesnotes will
evidence the same debt as the old
Senior Notesoriginal notes, and will be entitled toboth the benefits oforiginal notes and
the exchange notes are governed by the same indenture as the
old Senior Notes. The terms of the new SeniorIndenture.
Issuer........................ Amkor Technology, Inc., a Delaware corporation.
Notes are the same as the terms of
the old Senior Notes in all material respects except that the new Senior Notes:
- have been registered under the Securities Act,
- do not include certain rights to registration under the Securities Act,
and
- do not contain transfer restrictions or terms with respect to additional
interest payments applicable to the old Senior Notes.
New Senior Notes Offered...... $425,000,000 inOffered................. $425 million aggregate principal amount of
9 1/4% Senior Notes7.75% exchange notes due 2006.2013.
Maturity...................... May 1, 2006.
Interest......................15, 2013.
Interest on the new Senior Notes will accrue at
the rate of 9 1/4% per annum and will be
payable in cash in arrears semi-annually on
4
10Payment Dates........ May 115 and November 115 of each year, commencingbeginning
on November 1, 1999.15, 2003.
Ranking....................... The new Senior Notesexchange notes will be our unsecured senior
debt and will havedebt:
- the same ranking as
the old Senior Notes:
N The new Senior Notesexchange notes will be effectively
subordinated to all of our existing and future
secured debt, if any,including debt under the new
senior secured credit facility, to the extent
of such security, and to all existing and
future debt and other liabilities of our
subsidiaries, including trade payables;
N The new Senior Notes- the exchange notes will rank equally with all of
our existing and future unsecured senior debt
(includingincluding our 9.25% senior notes due 2008;
and
- the old Senior Notes);
and
N The new Senior Notesexchange notes will rank senior to all
of
our existing and future debt that expressly
provides that it is subordinated to the
Senior Notes,exchange notes, including the Senior
Subordinated Notesour 10.50% senior
subordinated notes due 2009, our 5.75%
convertible subordinated notes due 2006 and
our outstanding 5 3/4%
Convertible Subordinated Notes5.00% convertible subordinated notes due
2007.
7
Assuming we had completed the May 2003 (the
"Convertible Notes").
At September 30, 1999,note
offering to which this exchange offer relates,
redeemed our 9.25% senior notes due 2006,
closed our new senior secured credit facility
and repaid the old Senior Notes
were:
NTerm B loan under our previous
senior secured credit facility with the
proceeds of the new senior secured credit
facility, as if each had occurred as of March
31, 2003, the exchange notes would have been:
- effectively subordinated to $13.5$170 million of
senior secured debt and $242.1$272.6 million of
indebtedness and other liabilities of our
subsidiaries;
Nsubsidiaries, including trade payables but
excluding intercompany obligations;
- ranked equally with no amount$500 million of our 9.25%
senior debt;notes due 2008; and
N- senior to $406.9$708.8 million of subordinated
debt, including the Senior Subordinated Notesour 10.50% senior
subordinated notes due 2009, our 5.75%
convertible subordinated notes due 2006 and
the Convertible Notes.
Optional Redemption........... At any time prior to May 1, 2003, weour 5.00% convertible subordinated notes due
2007.
Redemption.................... We may redeem somethe exchange notes issued under
the Indenture (as defined below), in whole or
allin part, beginning on May 15, 2008, at the
redemption prices specified in this prospectus
under "Description of the new Senior Notes -- Optional
Redemption."
Change in Control............. If we experience a change in control, we will
be required to make an offer to repurchase the
exchange notes at redemption pricesa price equal to the greater of: (1)
100% of their principal amount or (2) the sum
of the present value of 100%101% of the
principal amount plus all required interest payments due
on such new Senior Notes (excluding accrued but
unpaid interest) discounted to the maturity
date using a discount rate equal to the
treasury yield plus 50 basis points plus
accrued and unpaid
interest, (including certain
additional interest)if any, to but excluding, the date of redemption. Seerepurchase.
For more detailed information, see "Description
of the Notes -- Description of the Senior Notes" under
the heading "Optional Redemption."
On or after May 1, 2003, we may redeem some or
all of the new Senior Notes at any time at the
redemption prices listed, and subject to
certain limitations described, in the section
entitled "Description of the
Notes -- Description of the Senior Notes" under
the heading "Optional Redemption."
Mandatory Offer to
Repurchase.................... If we sell certain assets or experience a
Change of Control (as defined in the Senior
Notes Indenture), we must offer to repurchase
the new Senior Notes at the prices listed in
the section entitled "Description of
Notes -- Description of the Senior Notes" under
the heading "RepurchaseRepurchase at the Option of
Holders.Holder -- Offer to Repurchase Upon Change of
Control."
5
11
Basic Covenants of the old and
new Senior Notes Indenture....Covenants..................... We will issue the new Senior Notesexchange notes under an
indenture (the "Senior Notes Indenture""Indenture") with State StreetU.S. Bank
and Trust Company,National Association, as Senior
Notes Trustee. The Senior Notes Indenture
will, among other things, restrict our ability
and the ability of our subsidiaries to:
N- incur additional indebtedness;
N- pay dividends, repurchase stock, prepay
subordinated debt and make investments and
other restricted payments;
N- create restrictions on the ability of our
subsidiaries to pay dividends or make other
payments;
N- engage in sale and leaseback transactions;
N- create liens;
N- enter into transactions with affiliates; and
N- sell assets or merge with or into other
companies.
These covenants are subject to important
exceptions whichthat are described in the section
entitled "Description of the Notes -- Description of the Senior Notes" under
the heading "CertainCertain
Covenants."
TERMS OF NEW SENIOR SUBORDINATED NOTES
The other exchange offer applies to up to $200,000,000 aggregate principal
amount of our old Senior Subordinated Notes. The new Senior Subordinated Notes
will evidence the same debt as the old Senior Subordinated Notes and will be
entitled to the benefits of the same indenture as the old Senior Subordinated
Notes. The terms of the new Senior Subordinated Notes are the same as the terms
of the old Subordinated Senior Notes in all material respects except that the
new Senior Subordinated Notes:
- have been registered under the Securities Act,
- do not include certain rights to registration under the Securities Act,
and
- do not contain transfer restrictions or terms with respect to additional
interest payments applicable to the old Notes.
New Senior Subordinated Notes
Offered....................... $200,000,000 in aggregate principal amount of
10 1/2% Senior Subordinated Notes due 2009.
Maturity...................... May 1, 2009.
Interest...................... Interest on the new Senior Subordinated Notes
will accrue at the rate of 10 1/2% per annum
and will be payable in cash in arrears semi-
annually on May 1 and November 1 of each year,
commencing on November 1, 1999.
Ranking....................... The new Senior Subordinated Notes will be our
unsecured senior subordinated debt and will
have the same ranking as the old Senior
Subordinated Notes:
N The new Senior Subordinated Notes will rank
junior to all of our existing and future debt
(other than our trade payables and $207
million of our Convertible Notes), including
the Senior Notes,
68
12
unless the terms of that debt expressly
provide that it ranks equal with, or is
subordinated in right of payment to, the new
Senior Subordinated Notes; and
N The new Senior Subordinated Notes will be
effectively subordinated to all existing and
future debt and other liabilities of our
subsidiaries, including trade payables.
At September 30, 1999, the old Senior
Subordinated Notes were:
N subordinated to $438.5 million of senior
debt, including the Senior Notes;
N effectively subordinated to $242.1 million of
liabilities of our subsidiaries; and
N senior to $206.9 million of subordinated
debt, including the Convertible Notes.
Optional Redemption........... At any time prior to May 1, 2002, we may redeem
up to 35% of the new Senior Subordinated Notes
with the cash proceeds of equity offerings of
our common stock at a price equal to 110.50% of
the principal amount of the new Senior
Subordinated Notes so redeemed plus accrued and
unpaid interest, if any, subject to certain
conditions described in the section entitled
"Description of the Notes -- Description of the
Senior Subordinated Notes" under the heading
"Optional Redemption."
On or after May 1, 2004, we may redeem some or
all of the new Senior Subordinated Notes at any
time at the redemption prices listed, and
subject to certain limitations described, in
the section entitled "Description of the
Notes -- Description of the Senior Subordinated
Notes" under the heading "Optional Redemption."
Mandatory Offer to
Repurchase.................... If we sell certain assets or experience a
Change of Control (as defined in the indenture
governing the new Senior Subordinated Notes),
we must offer to repurchase the new Senior
Subordinated Notes at the prices listed in the
section entitled "Description of the Notes --
Description of the Senior Subordinated Notes"
under the heading "Repurchase at the Option of
Holders."
Basic Covenants of the old and
new Senior Subordinated Notes
Indenture................... We will issue the new Senior Subordinated Notes
under an indenture (the "Senior Subordinated
Notes Indenture") with State Street Bank and
Trust Company, as Senior Subordinated Notes
Trustee. The Senior Subordinated Notes
Indenture will, among other things, restrict
our ability and the ability of our subsidiaries
to:
N incur additional indebtedness;
N pay dividends, repurchase stock, prepay
subordinated debt and make investments and
other restricted payments;
N create restrictions on the ability of our
subsidiaries to pay dividends or make other
payments;
N create liens;
N enter into transactions with affiliates; and
N sell assets or merge with or into other
companies.
7
13
These covenants are subject to important
exceptions which are described in the section
entitled "Description of the
Notes -- Description of the Senior Subordinated
Notes" under the heading "Certain Covenants."
TERMS COMMON TO NEW SENIOR NOTES AND NEW SENIOR SUBORDINATED NOTES.
Registration Rights........... Holders of the new Notes (other than as set
forth below) are not entitled to any
registration rights with respect to the new
Notes. Pursuant to the registration rights
agreement among the initial purchasers of the
old Notes and us, we agreed to file an exchange
offer registration statement with respect to an
offer to exchange the old Notes for the new
Notes. The registration statement of which this
prospectus is a part constitutes such exchange
offer registration statement. Under certain
circumstances, certain holders of old Notes
(including holders of old Notes who may not
participate in the exchange offer) may in
certain circumstances require us to file, and
cause to become effective, a shelf registration
statement under the Securities Act which would
cover resales of old Notes by such holders.
Use of Proceeds............... We will not receive any proceeds from the
exchange offer.
RISK FACTORS
You should carefully consider each of the following risks and uncertainties
associated with our company and the exchange offer, as well as all the other
information set forth in this prospectus and, in particular, you should evaluate the specific risk factors set
forth under "Risk Factors," beginning on page 11, for a discussion of certain
risks involved in making an investment in the new Senior Notes and the new
Senior Subordinated Notes.
8
14
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth summary historical income statement and other
financial data determined in accordance with U.S. generally accepted accounting
principles ("U.S. GAAP"). We have derived the summary historical financial data
from our consolidated financial statements.
You should read the following table in conjunction with our Annual Report on
Form 10-K and the other documents incorporated by reference in this prospectus.
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1994 1995 1996 1997 1998
-------- -------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Net revenues...................... $572,918 $932,382 $1,171,001 $1,455,761 $1,567,983
Cost of revenues -- including
purchases from ASI............... 514,648 783,335 1,022,078 1,242,669 1,307,150
-------- -------- ---------- ---------- ----------
Gross profit..................... 58,270 149,047 148,923 213,092 260,833
Selling, general and
administrative................... 41,337 55,459 66,625 103,726 119,846
Research and development.......... 3,090 8,733 10,930 8,525 8,251
-------- -------- ---------- ---------- ----------
Operating income................. 13,843 84,855 71,368 100,841 132,736
Interest expense, net............. 5,752 9,797 22,245 32,241 18,005
Foreign currency (gain) loss...... (4,865) 1,512 2,961 (835) 4,493
Other (income) expense, net....... (877) 6,523 3,150 8,429 9,503
-------- -------- ---------- ---------- ----------
Income before income taxes,
equity in income (loss) of ASI
and minority interest.......... 13,833 67,023 43,012 61,006 100,735
Provision for income taxes(a)..... 2,977 6,384 7,876 7,078 24,716
Equity in income (loss) of
ASI(b)........................... 1,762 2,808 (1,266) (17,291) --
Minority interest(c).............. 1,044 1,515 948 (6,644) 559
-------- -------- ---------- ---------- ----------
Net income (loss)(a)............. $ 11,574 $ 61,932 $ 32,922 $ 43,281 $ 75,460
======== ======== ========== ========== ==========
Basic net income per common
share(g)......................... $ .14 $ .75 $ .40 $ .52 $ .71
======== ======== ========== ========== ==========
Diluted net income per common
share(g)......................... $ .14 $ .75 $ .40 $ .52 $ .70
======== ======== ========== ========== ==========
OTHER FINANCIAL DATA:
EBITDA(d)......................... $ 29,332 $104,946 $ 126,043 $ 174,276 $ 241,256
Depreciation and amortization..... $ 14,612 $ 26,614 $ 57,825 $ 81,864 $ 119,239
Capital expenditures, excluding
acquisition of K4 assets......... $ 68,926 $123,645 $ 185,112 $ 178,990 $ 107,889
Ratio of earnings to fixed
charges(e)....................... 2.0x 4.6x 2.4x 2.5x 4.4x
PRO FORMA
UNAUDITED(H)
NINE MONTHS ENDED ----------------------------
SEPTEMBER 30, NINE MONTHS
(UNAUDITED) YEAR ENDED ENDED
----------------------- DECEMBER 31, SEPTEMBER 30,
1998 1999 1998 1999
---------- ---------- ------------ -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Net revenues...................... $1,143,175 $1,371,698 $1,577,594 $1,374,927
Cost of revenues -- including
purchases from ASI............... 948,920 1,144,871 1,318,222 1,142,202
---------- ---------- ---------- ----------
Gross profit..................... 194,255 226,827 259,372 232,725
Selling, general and
administrative................... 87,671 105,499 127,046 107,843
Research and development.......... 6,104 8,084 9,417 8,620
---------- ---------- ---------- ----------
Operating income................. 100,480 113,244 122,909 116,262
Interest expense, net............. 16,503 29,429 84,005 54,177
Foreign currency (gain) loss...... 3,833 151 4,493 151
Other (income) expense, net....... 7,092 6,225 9,232 6,338
---------- ---------- ---------- ----------
Income before income taxes,
equity in income (loss) of ASI
and minority interest.......... 73,052 77,439 25,179 55,596
Provision for income taxes(a)..... 16,688 20,906 8,316 14,339
Equity in income (loss) of
ASI(b)........................... -- -- (71,633) (196)
Minority interest(c).............. 559 -- 559 --
---------- ---------- ---------- ----------
Net income (loss)(a)............. $ 55,805 $ 56,533 $ (55,329) $ 41,061
========== ========== ========== ==========
Basic net income per common
share(g)......................... $ .55 $ .48 $ (.52) $ .35
========== ========== ========== ==========
Diluted net income per common
share(g)......................... $ .53 $ .47 $ (.52) $ .35
========== ========== ========== ==========
OTHER FINANCIAL DATA:
EBITDA(d)......................... $ 179,628 $ 232,059 $ 286,537 $ 256,400
Depreciation and amortization..... $ 86,998 $ 126,211 $ 176,670 $ 148,621
Capital expenditures, excluding
acquisition of K4 assets......... $ 80,494 $ 175,806 $ 134,885 $ 178,489
Ratio of earnings to fixed
charges(e)....................... 4.0x 2.9x 1.3x 1.9x
SEPTEMBER 30, SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, 1999 1999
1997 1998 (UNAUDITED) PRO FORMA UNAUDITED
------------ ------------ -------------- -------------------
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ 90,917 $ 227,587 $ 81,921 $ 40,321
Short-term investments............................. 2,524 1,000 205,871 205,871
Working capital (deficit).......................... (38,219) 191,383 214,951 173,351
Total assets....................................... 855,592 1,003,597 1,748,128 1,748,128
Total debt, including current maturities(f)........ 514,027 260,503 868,364 868,364
Stockholders' equity............................... 90,875 490,361 548,317 548,317
9
15
- ---------------------------
(a) Prior to our reorganization in April 1998, our predecessor, Amkor
Electronics, Inc. ("AEI"), elected to be taxed as an S Corporation under the
Internal Revenue Code of 1986 (the "Code") and comparable state tax laws. As
a result, AEI did not recognize any provision for federal income tax expense
from January 1, 1994 through April 28, 1998. In accordance with applicable
SEC regulations, we have provided in our consolidated financial statements
the pro forma adjustments for income taxes (unaudited) to reflect the
additional U.S. federal income taxes which we would have recorded if AEI had
been a C Corporation during these periods. We do not reflect these
adjustments in our Summary Historical Consolidated Financial Data. The pro
forma provision for income taxes would have been $3,177, $16,784, $10,776,
$10,691, $29,216 and $21,188 for the years ended December 31, 1994, 1995,
1996, 1997, 1998 and the nine months ended September 30, 1998, respectively.
Pro forma net income would have been $11,374, $51,532, $30,022, $39,668,
$70,960 and $51,305 for the years ended December 31, 1994, 1995, 1996, 1997,
1998 and the nine months ended September 30, 1998, respectively. Basic pro
forma net income per common share would have been $.14, $.62, $.36, $.48,
$.67 and $.50 for the years ended December 31, 1994, 1995, 1996, 1997, 1998
and the nine months ended September 30, 1998, respectively. Diluted pro
forma net income per common share would have been $.14, $.62, $.36, $.48,
$.66 and $.49 for the years ended December 31, 1994, 1995, 1996, 1997, 1998
and the nine months ended September 30, 1998, respectively. On a pro forma
basis to give effect to the Transaction and the Investment as if they had
occurred on January 1, 1998, net loss would have been $59,829 for the year
ended December 31, 1998. Basic and diluted pro forma net loss per common
share would have both been $(.56) for the year ended December 31, 1998 on a
pro forma basis to give effect to the Transaction and the Investment as if
they had occurred on January 1, 1998. Refer to Note (g) for share
information used to compute per share data.
(b) We disposed of our interest in ASI in February 1998. In 1997, we recognized
a loss of $17,291 resulting principally from the impairment of value of our
investment in ASI, which we sold in February 1998. On a pro forma basis, we
recognized a loss of $71,633 in 1998, principally due to ASI's impairment
loss on loans to affiliates and guarantee obligation loss.
(c) Represents ASI's 40% interest in the earnings of Amkor/Anam Pilipinas, Inc.
("AAP"), one of our subsidiaries in the Philippines. We purchased ASI's
interest in AAP with a portion of the proceeds from our initial public
offering in May 1998.
(d) We have calculated EBITDA by adding: (1) income before income taxes, equity
in income (loss) of ASI and minority interest, (2) foreign currency (gain)
loss, (3) interest expense, net and (4) depreciation and amortization. For
the nine months ended September 30, 1999, we have also added $1,340 of
equity in the loss of our investment in TSTC for purposes of calculating
EBITDA. We have included data concerning EBITDA because we understand that
investors use it to provide information regarding our historical ability to
service debt. EBITDA is not determined in accordance with U.S. GAAP. EBITDA
is not indicative of cash flows from operating activities, and you should
not consider EBITDA in isolation, or as an alternative to, or more
meaningful than, measures of performance determined in accordance with U.S.
GAAP. In addition, EBITDA, as defined here, may not be comparable to
similarly titled measures used by other companies.
(e) We have calculated the ratio of earnings to fixed charges by dividing: (1)
the sum of (a) income (loss) before income taxes, equity in income (loss) of
ASI and minority interest less (b) undistributed earnings in subsidiaries of
which we own less than 50% plus (c) fixed charges by (2) fixed charges.
Fixed charges consist of interest expense plus one-third of rental expense.
We believe that one-third of rental expense is representative of the
interest factor of rental payments under our operating leases.
(f) Includes short-term borrowings and current portion of long-term debt.
Balance as of December 31, 1997 includes amounts due to Anam USA, Inc.
("AUSA"), a wholly-owned financing subsidiary of ASI. Prior to our initial
public offering, we met a portion of our cash requirements from financing
obtained for our benefit by AUSA. At December 31, 1998 and September 30,
1999, we had no outstanding borrowings from AUSA.
(g) We used 82,610 shares of common stock and common stock and common stock
equivalents to compute both basic and diluted net income per common share
for the years ended December 31, 1994, 1995, 1996 and 1997. We used 106,221
shares of common stock and 116,596 shares of common stock and common stock
equivalents to compute basic and diluted net income per common share,
respectively, for the year ended December 31, 1998. We used 102,284 shares
of common stock and 110,933 shares of common stock and common stock
equivalents to compute basic and diluted net income per common share,
respectively, for the nine months ended September 30, 1998. We used 118,090
shares of common stock and 134,079 shares of common stock and common stock
equivalents to compute basic and diluted net income per common share,
respectively, for the nine months ended September 30, 1999. We used 106,221
shares of common stock to compute basic and diluted net income per common
share on a pro forma basis to give effect to the Transaction and the
Investment for the year ended December 31, 1998. We
10
16
used 118,090 shares of common stock and 118,748 shares of common stock and
common stock equivalents to compute basic and diluted net income,
respectively, on a pro forma basis to give effect to the Transaction and the
Investment for the nine month period ended September 30, 1999.
(h) You should read other documents incorporated by reference in this prospectus
for information regarding the unaudited pro forma consolidated financial
information for the year ended December 31, 1998 and the nine months ended
September 30, 1999.
11
17
RISK FACTORS
You should carefully consider the risks described below and the other
information contained or incorporated by reference ininto this
prospectus, before
tendering your old Notes for exchange. The risks and uncertainties described
below are notincluding the only ones facinginformation set forth in our company. Additional risks and
uncertainties that are presently unknown to us or that we currently deem
immaterial may also impair our business operations. We cannot assure you that
any ofQuarterly Report on Form
10-Q filed on May 9, 2003, under the events discussed in the risk factors below will not occur. If they
do, our business, financial condition or results of operations could be
materially adversely affected. In such case, the trading price of our securities
could decline, and you might lose all or part of your investment. You should
also carefully consider the risks described inheading "Risk Factors that May Affect
Future Operating Performance"Performance," which is specifically incorporated herein by
reference.
RISKS RELATING TO THE EXCHANGE OFFER
BECAUSE THERE IS NO PUBLIC MARKET FOR THE EXCHANGE NOTES, YOU MAY NOT BE ABLE
TO SELL YOUR EXCHANGE NOTES
The exchange notes will be registered under the Securities Act, but will
constitute a new issue of securities with no established trading market, and
there can be no assurance as to:
- the liquidity of any trading market that may develop;
- the ability of holders to sell their exchange notes; or
- the price at which the holders would be able to sell their exchange
notes.
If a trading market were to develop, the exchange notes might trade at
higher or lower prices than their principal amount or purchase price, depending
on many factors, including prevailing interest rates, the market for similar
securities and our financial performance.
Any market-making activity in the section entitled "Management's Discussionexchange notes will be subject to the
limits imposed by the Securities Act and Analysis of Financial Condition and Results of Operation" in our Annual
Report on Form 10-Kthe Exchange Act. There can be no
assurance that an active trading market will exist for the fiscal year ended December 31, 1998exchange notes or
that any trading market that does develop will be liquid.
In addition, any original note holder who tenders in the exchange offer for
the purpose of participating in a distribution of the exchange notes may be
deemed to have received restricted securities and, if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
YOUR ORIGINAL NOTES WILL NOT BE ACCEPTED FOR EXCHANGE IF YOU FAIL TO FOLLOW
THE EXCHANGE OFFER PROCEDURES
We will issue exchange notes pursuant to the exchange offer only after a
timely receipt of your original notes, a properly completed and duly executed
letter of transmittal and all other required documents. Therefore, if you want
to tender your original notes, please allow sufficient time to ensure timely
delivery. If we do not receive your original notes, letter of transmittal and
other required documents incorporated by reference in this prospectus.
This prospectus contains forward-looking statements made asthe expiration date of the dateexchange offer, we will
not accept your original notes for exchange. We are under no duty to give
notification of this prospectus regarding our expected performancedefects or irregularities with respect to the tenders of
original notes for exchange. If there are defects or irregularities with respect
to your tender of original notes, we will not accept your original notes for
exchange.
IF YOU DO NOT EXCHANGE YOUR ORIGINAL NOTES, YOUR ORIGINAL NOTES WILL CONTINUE
TO BE SUBJECT TO THE EXISTING TRANSFER RESTRICTIONS AND YOU MAY BE UNABLE TO
SELL YOUR OUTSTANDING ORIGINAL NOTES
We did not register the original notes, nor do we intend to do so following
the exchange offer. Original notes that involve risksare not tendered will therefore continue
to be subject to the existing transfer restrictions and uncertainties. Our actual results could differ materially from those anticipatedmay be transferred only
in these forward-looking statements aslimited circumstances under applicable securities laws. If you do not
exchange your original notes, you will lose your right to have your original
notes registered under the federal securities laws. As a result, if you hold
original notes after the exchange offer, you may be unable to sell your original
notes. We have no obligation, except in limited circumstances, nor do we
currently intend, to file an additional registration statement to cover the
resale of certain factors, includingoriginal notes that did not tender in the risks faced by us described below and elsewhere in this prospectus.exchange offer or to re-
offer to exchange the exchange notes for original notes following the expiration
of the exchange offer.
9
RISKS RELATED TO AN INVESTMENT IN THE NOTES
THE FOLLOWING RISK FACTORS APPLY TO BOTH THE ORIGINAL NOTES AND THE EXCHANGE
NOTES.
HIGH LEVERAGE AND RESTRICTIVE COVENANTS -- OUR SUBSTANTIAL INDEBTEDNESS COULD
ADVERSELY AFFECT THEOUR FINANCIAL HEALTH OF OUR COMPANYCONDITION AND PREVENT US FROM FULFILLING OUR
OBLIGATIONS UNDER THE NEW NOTES.NOTES
Substantial LeverageLeverage. We now have, and after this offering will continue
to have, a significant amount of indebtedness. The following table shows
certain important financial data and credit statistics:
AT SEPTEMBER 30, 1999
---------------------
Total debt, including current maturities.................... $868,364
--------
Stockholders' equity........................................ 548,317
--------
Ratio of total debt to stockholders' equity................. 1.6X
--------
NINE MONTHS ENDED
SEPTEMBER 30, 1999
-----------------------------
Ratio of EBITDA to cash interest expense, net............... 8.6X
--------
Covenants in the Senior Notes Indenture, the Senior Subordinated Notes
Indenture and our future credit facilities may materially restrict our
operations, including our ability to incur debt, pay dividends, make certain
investments and encumber or dispose of assets. In addition, financial covenants
contained in agreements relating to our existing and future senior debt and
senior secured debt could lead to a default in the event our results of
operations do not meet our plans. In the event of any default under covenants
contained in agreements relating to our senior debt, including the Senior Notes,
we could be prohibited from making payments of interest or principal on the new
Senior Subordinated Notes.
Our substantial indebtedness could have important consequences to holders of
the new Notes. For example, it could:
N make it more difficult for us to satisfy our obligations with respect to the
new Senior Notes and the new Senior Subordinated Notes;
N increase our vulnerability to general adverse economic and industry
conditions;
12
18
N limit our ability to fund future working capital, capital expenditures,
research and development and other general corporate requirements;
N require us to dedicate a substantial portion of our cash flow from operations
to service payments on our debt;
N limit our flexibility to react to changes in our business and the industry in
which we operate;
N place us at a competitive disadvantage to any of our competitors that have
less debt; and
N limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds.
Failing to comply with those covenants could result in an event of default,
which, if not cured or waived, could have a material adverse effect on us.
Ability to Service Debt
Our ability to make payments on and to refinance our debt, including the new
Senior Notes and the new Senior Subordinated Notes, and to fund planned capital
expenditures and research and development efforts will depend on our ability to
generate cash in the future. Our ability to generate cash may be subject to
general economic, financial, competitive, legislative and regulatory conditions
and other factors that are beyond our control.
We cannot assure you that our business will generate cash in an amount
sufficient to enable us to service our debt, including the new Senior Notes and
the new Senior Subordinated Notes, or to fund our other liquidity needs. We
expect that substantial amounts of our debt will come due prior to the final
maturity date of the new Senior Notes and the new Senior Subordinated Notes,
which we will be required to repay or refinance. The Convertible Notes will
mature prior to the new Notes on May 1, 2003 and will be payable in cash unless
the holders of the Convertible Notes elect to convert the principal amount of
such notes into our common stock. In addition, we may need to refinance all or a
portion of our debt, including the new Notes, on or before maturity. We cannot
assure you that we will be able to refinance any of our debt on commercially
reasonable terms or at all.
Additional Borrowings Available
Despitedespite current debt
levels, the terms of the Senior Notes Indentureindentures governing the notes and the
Senior Subordinated Notes Indentureour other securities
do not prohibit us or our subsidiaries from incurring substantially more debt.
If new debt is added to our consolidated debt level, the related risks that we
now face could intensify. The following table shows certain important financial
data and credit ratios (assuming we had completed the May 2003 note offering to
which this exchange offer relates, redeemed our 9.25% senior notes due 2006,
closed our new senior secured credit facility and repaid the Term B loan under
our previous senior secured credit facility with the proceeds of the new senior
secured credit facility, as if each had occurred as of March 31, 2003):
AT MARCH 31, 2003
-----------------
(IN THOUSANDS)
Total debt, including current maturities.................... $1,873,378
Stockholders' equity(1)..................................... 209,214
Ratio of total debt to stockholders' equity................. 8.95x
- ---------------
(1) We adjusted stockholders' equity of $240.8 million at March 31, 2003 by
$31.6 million to reflect the 4.625% premium paid in connection with, and
additional interest accruing prior to, the redemption of our 9.25% senior
notes due 2006 and write-offs of unamortized deferred debt issuance costs
associated with such notes and our previous senior secured credit facility.
Covenants in the agreements governing our existing debt, and debt we may
incur in the future, may materially restrict our operations, including our
ability to incur debt, pay dividends, make certain investments and payments, and
encumber or dispose of assets. In addition, financial covenants contained in
agreements relating to our existing and future debt could lead to a default in
the event our results of operations do not meet our plans. A default under one
debt instrument may also trigger cross-defaults under our other debt
instruments. An event of default under any debt instrument, if not cured or
waived, could have a material adverse effect on us.
Our substantial indebtedness could have important consequences to holders
of the notes. For example, it could:
- make it more difficult for us to satisfy our obligations with respect to
the notes;
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to fund future working capital, capital expenditures,
research and development and other general corporate requirements;
- require us to dedicate a substantial portion of our cash flow from
operations to service payments on our debt;
- limit our flexibility to react to changes in our business and the
industry in which we operate;
- place us at a competitive disadvantage to any of our competitors that
have less debt; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds.
Ability to Service Debt. We cannot assure you that our business will
generate cash in an amount sufficient to enable us to service our debt,
including the notes, or to fund our other liquidity needs. We expect that
substantial amounts of our debt will come due prior to the final maturity date
of the notes, which we will be required to repay or refinance. Our 5.75%
convertible subordinated note due 2006, our 5% convertible subordinated notes
due 2007, our 9.25% senior note due 2008 and our 10.5% convertible subordinated
notes
10
due 2009 and amounts outstanding under our new senior secured credit facility
will mature prior to the 2013 maturity date of the notes and will be payable in
cash unless the holders of the convertible notes elect to convert the principal
amount of such notes into our common stock. In addition, we may need to
refinance all or a portion of our debt, including the notes, on or before
maturity. In June 2003 we repurchased our 9.25% senior notes due 2006 using the
proceeds of the May 2003 note offering to which this exchange offer relates. We
cannot assure you that we will be able to refinance any of our debt on
commercially reasonable terms or at all.
EFFECTIVE SUBORDINATION OF THE NEW SENIOR NOTES TO SENIOR SECURED DEBT -- THE
NEW SENIOR NOTES ARE EFFECTIVELY SUBORDINATED TO OUR EXISTING SENIOR SECURED
DEBT.
The new Senior Notes are not secured. Holders of secured debt will have
claims that are prior to claims of holders of new Senior Notes to the extent of
the assets securing such other debt. At September 30, 1999, the old Senior Notes
were effectively subordinated to $13.5 million of secured debt without providing
holders of the Senior Notes or the Senior Subordinated Notes collateral on a
pari passu basis or at all. Under the terms of the Indentures, we are permitted
to incur additional secured debt without providing holders of the Senior Notes
or the Senior Subordinated Notes collateral on a pari passu basis or at all.
13
19
EFFECTIVE SUBORDINATION OF THE NEW SENIOR NOTES AND THE NEW SENIOR SUBORDINATED NOTES TO LIABILITIES OF OUR SUBSIDIARIES -- YOUR
RIGHT TO RECEIVE PAYMENTS ON THE NEW NOTES FROM FUNDS PROVIDED BY OUR SUBSIDIARIES
IS JUNIOR IN RIGHT OF PAYMENT TO THE CLAIMS OF THE CREDITORS OF OUR
SUBSIDIARIES.
None of our subsidiaries will initially guarantee the new Senior Notes or
the new Senior Subordinated Notes, and we currently have no plans to have any
subsidiary guarantee the new Senior Notes or the new Senior Subordinated Notes.
BecauseSUBSIDIARIES
We conduct a large portion of our operations are conducted through and
substantially all of our assets are owned by, our subsidiaries, the new Senior
Notes and the new Senior Subordinated Notes will be effectively subordinated to
all existing and future liabilities of our subsidiaries.
Earnings generated by
anyAccordingly, our ability to meet our cash obligations is dependent upon the
ability of our subsidiaries to make cash payments to us. We expect distributions
from our subsidiaries to be a large source of funds for payment of interest on
the notes. The claims of creditors (including trade creditors) of any subsidiary
will generally have priority as well asto the existing assets of such subsidiaries,
must be used by such subsidiaries to fulfill their debt service requirements and
other obligations before we can use them to repay our outstanding debts and
obligations.subsidiary over the claims
of the holders of the notes. In the event of a bankruptcy, liquidation or reorganization of any of our
subsidiaries, holders of their debt and their trade creditors will
generally be entitledour right to payment of their claims fromreceive the assets of those
subsidiaries before any assets are made available for distribution to us. At
September 30, 1999,such subsidiary (and the
new Senior Notes and the new Senior Subordinated Notes
were effectively subordinated to $242.1 million of liabilities (including trade
payables) of our subsidiaries. Our subsidiaries generated approximately 57% of
our gross profit for the nine months ended September 30, 1999 and held
approximately 72% of our consolidated assets as of September 30, 1999. After
giving pro forma effect to the Transaction, our subsidiaries would have
generated approximately 58% of our gross profit for the nine months ended
September 30, 1999.
SUBORDINATION OF THE NEW SENIOR SUBORDINATED NOTES -- THE RIGHT OF THE HOLDERS
OF THE NEW SENIOR SUBORDINATED NOTES TO RECEIVE PAYMENTS ON THE NEW SENIOR
SUBORDINATED NOTES IS JUNIOR TO OUR SENIOR DEBT, INCLUDING THE SENIOR NOTES.
The new Senior Subordinated Notes will rank junior inresulting right of payment to
all of our existing and future debt (other than our trade payables and the
Convertible Notes), including the Senior Notes, unless the terms of that debt
expressly provide that it ranks equal with, or subordinated in right of payment
to, the new Senior Subordinated Notes. As a result, upon any distribution to our
creditors in a bankruptcy, liquidation or reorganization or similar proceeding, the holders of our senior debt, including the Senior Notes,notes to participate in the distribution
of the proceeds of those assets) will effectively be entitled to
be paid in full before any payment may be made with respectsubordinated by operation
of law to the new Senior
Subordinated Notes. In addition, all payments on the new Senior Subordinated
Notes will be blocked in the eventclaims of a payment default on senior debt,
including the Senior Notes,creditors (including trade creditors) of such subsidiary
and may be blocked for up to 179holders of 360 consecutive
days in the eventsuch subsidiary's preferred stock and any guarantees by such
subsidiary of certain non-payment defaults on senior debt, including the
Senior Notes.our indebtedness. In the event of athe liquidation, bankruptcy,
liquidation or reorganization, insolvency, receivership or similar proceeding relating to us,or any assignment
for the benefit of our creditors or a marshaling of our assets or liabilities,
holders of the notes may receive ratably less than other such creditors or
interest holders. Assuming we had completed the May 2003 note offering to which
this exchange offer relates, redeemed our 9.25% senior notes due 2006, closed
the new Senior Subordinated Notes will
participatesenior secured credit facility and repaid the Term B loan under our
previous senior secured credit facility with trade creditors and all other holders of our subordinated debt
in the assets remaining after we have paid all of the senior debt, including the
Senior Notes. However, because the Senior Subordinated Notes Indenture requires
that amounts otherwise payable to holdersproceeds of the new Senior Subordinated Notes
in a bankruptcy or similar proceeding be paid to holderssenior
credit facility, as if each had occurred as of senior debt untilMarch 31, 2003, the holders of senior debtnotes would
have been paid in full, holderseffectively subordinated to $272.6 million of the Senior
Subordinated Notes may receive less, ratably, than holdersindebtedness and other
liabilities of our subsidiaries, including trade payables in
any such proceeding. In any of these cases, we may not have sufficient funds to
pay all of our creditors, and holders of Senior Subordinated Notes may receive
less, ratably, than the holders of senior debt, including the Senior Notes.
At September 30, 1999, the new Senior Subordinated Notes were subordinate to
$438.5 million of senior debt, including the Senior Notes. We will be permitted
to borrow substantial additional senior debt in the future under the terms of
the Indentures.
14
20but excluding
intercompany obligations.
FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE, THE ABILITYOR BE ABLE TO RAISE, THE
FUNDS NECESSARY TO FINANCE AN OFFER TO REPURCHASE THE NOTES FOLLOWING A CHANGE
OF CONTROL OFFER REQUIREDOR WE MAY BE PROHIBITED FROM DOING SO BY THE
INDENTURES.OUR SECURED CREDIT
FACILITIES.
Upon the occurrence of certain specific kinds ofa change of control, events,
we will be required tomust offer to repurchase all
outstanding Senior Notes and
Senior Subordinated Notes.notes. However, it is possible that we will not have sufficient
funds at the time of the change of control to make the required repurchases of
Senior Notes and Senior Subordinated Notesnotes or that restrictions in our future credit facilities or other debt agreements may
not allow such repurchases.
DIFFICULTIES IN ENFORCING JUDGMENTS IN FOREIGN JURISDICTIONS
Since a large portion of our assets are located outside the U.S., any
judgments obtained in the U.S. against us, including judgments with respect to
the payment of principal, premium, interest, offer price, or other amounts
payable with respect to the notes may be not collectible within the U.S. If
we doholders of notes intend to enforce a judgment obtained in the U.S. against our
assets located outside the U.S., they may be subject to additional procedures
and other difficulties which would not have sufficient funds to repurchase allbe required for enforcement of such
judgment in the U.S.
PRIVATE PLACEMENT
We issued $425 million in principal amount of the Notes, we will be requiredoriginal notes dated as
of May 8, 2003 to repurchase the Senior Notes before offeringinitial purchasers of those notes and received proceeds
that after deducting expenses and commissions represented an aggregate of $416.2
million in net proceeds. We issued the original notes to repurchase any of the Senior
Subordinated Notes. In addition, certain important corporate events, such as
leveraged recapitalizations that would increase the level of our indebtedness,
wouldinitial purchasers
in a transaction exempt from or not constitute a "Change of Control" under the Indentures.
CONSEQUENCES OF NOT TENDERING OLD NOTES -- IF YOU DO NOT TENDER YOUR OLD NOTES,
YOU WILL CONTINUE TO HOLD RESTRICTED SECURITIES.
Upon consummation of the exchange offers, we will have no further obligationsubject to register your old Notes, except under limited circumstances. Thereafter, if
you do not tender your old Notes in the exchange offer, you will continue to
hold restricted securities which may not be offered, sold or otherwise
transferred, pledged or hypothecated except pursuant to Rule 144 and Rule 144A
under the Securities Act or pursuant to any other exemption from registration under the Securities
Act relatingAct. The initial purchasers then
11
offered and resold the original notes to qualified institutional buyers in
compliance with Rule 144A or non-U.S. persons in compliance with Regulation S
under the disposition of securities, provided
that an opinion of counsel is furnished to us that such an exemption is
available. These restrictions will likely limitSecurities Act.
USE OF PROCEEDS
We are making the trading market and price for
the old Notes.
LACK OF PUBLIC MARKET -- BECAUSE THERE IS NO PUBLIC MARKET FOR THE NEW NOTES,
YOU MAY FIND IT DIFFICULT TO SELL THE NEW NOTES.
The new Notes are being offered to the holders of the old Notes. Prior to
this exchange offer there has been no existing trading market for any ofto satisfy our obligations under the
old Notes,original notes, the Indenture and a trading market may not develop for the new Notes. We do not
intend to apply for listing of the new Notes on any securities exchange or on
the Nasdaq National Market. The new Notes may trade at a discount from their
initial offering price, depending upon prevailing interest rates, the market for
similar securities, our performance and other factors. In connection with the
issuance of the old Notes, we were advised by the initial purchasers that they
intended to make a market in the new Notes. However, the initial purchasers are
not obligated to do so and any such market-making activities may be discontinued
at any time without notice. Therefore, we cannot assure you that an active
market for the new Notes will develop.
15
21
USE OF PROCEEDSRegistration Rights Agreement. We will not
receive any cash proceeds from the issuanceexchange offer. In consideration of issuing
the exchange notes in the exchange offer, we will receive an equal principal
amount of original notes. Any original notes that are properly tendered and
accepted in the exchange offer will be canceled and retired and cannot be
reissued.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the periods indicated.
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED --------------------------------
MARCH 31, 2003 2002 2001 2000 1999 1998
------------------ ---- ---- ---- ---- ----
Ratio........................... --x(1) --x(1) --x(1) 2.2x 2.3x 4.1x
- ---------------
(1) The ratio of earnings to fixed charges was less than 1:1 for the three
months ended March 31, 2003. In order to achieve a ratio of earnings to
fixed charges of 1:1, we would have had to generate an additional $40.7
million of earnings in the three months ended March 31, 2003. The ratio of
earnings to fixed charges was less than 1:1 for the year ended December 31,
2002. In order to achieve a ratio of earnings to fixed charges of 1:1, we
would have had to generate an additional $564.3 million of earnings in the
year ended December 31, 2002. The ratio of earnings to fixed charges was
less than 1:1 for the year ended December 31, 2001. In order to achieve a
ratio of earnings to fixed charges of 1:1, we would have had to generate an
additional $438.5 million of earnings in the year ended December 31, 2001.
12
CAPITALIZATION
The following table sets forth our cash and cash equivalents and total
capitalization as of March 31, 2003 (1) on a historical basis and (2) as
adjusted to give effect to this offering, the redemption of our 9.25% senior
notes due 2006, the closing of the new Notes
offeredsenior secured credit facility and the
repayment of the Term B loan under our previous senior secured credit facility
with the proceeds of the new senior secured credit facility, as if each had
occurred as of March 31, 2003. You should read the as adjusted capitalization
data set forth in exchange for old Notes. The old Notes willthe table below in conjunction with "Use of Proceeds,"
"Selected Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and our consolidated financial
statements and the notes thereto, incorporated by reference into this
Registration Statement.
AT MARCH 31, 2003
------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
Cash and cash equivalents................................... $ 351,485 $ 390,409
========== ==========
Long-term debt and short-term borrowings:
Old senior secured credit facilities:
Term B loan due September 2005, LIBOR plus 4.00%....... $ 96,868 $ --
$100.0 million revolving line of credit due March 2005,
LIBOR plus 3.75%..................................... -- --
New senior secured credit facilities:
Term loan due January 2006, LIBOR plus 4.00%........... -- 170,000
$30.0 million revolving line of credit due October
2005, LIBOR plus 4.25%............................... -- --
9.25% Senior notes due May 2006........................... 425,000 --
9.25% Senior notes due February 2008...................... 500,000 500,000
7.75% Senior notes due May 2013........................... -- 425,000
10.50% Senior subordinated notes due May 2009............. 200,000 200,000
5.75% Convertible subordinated notes due June 2006........ 250,000 250,000
5.00% Convertible subordinated notes due March 2007....... 258,750 258,750
Other debt................................................ 69,628 69,628
---------- ----------
Total debt................................................ 1,800,246 1,873,378
---------- ----------
Total stockholders' equity(1)............................... 240,811 209,214
---------- ----------
Total capitalization........................................ $2,041,057 $2,082,592
========== ==========
- ---------------
(1) We adjusted stockholders' equity of $240.8 million at March 31, 2003 by
$31.6 million to reflect the 4.625% premium to be exchanged for new Notespaid in connection with,
and additional interest accruing prior to, the redemption of like principal amount. Old Notes that are exchanged will be retiredour 9.25%
senior notes due 2006 and canceled.
OUR INDEBTEDNESS AND FINANCING AGREEMENTS
Aswrite-offs of September 30, 1999,unamortized deferred debt issuance
costs associated with such notes and our previous senior secured credit
facility.
13
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the principal amountsale of all our indebtedness,
calculated on a consolidated basis, was approximately $868.4 million.
In June of 1997, Amkor Receivables Corp., our wholly-owned special purpose
subsidiary,the original notes, we entered into a
receivables facility (the "Receivables Facility"),Registration Rights Agreement with The First National Bank of Chicago and Falcon Asset Securitization Corp.
("Falcon"), a receivables conduit, for the purpose of selling receivables
originated by us. Pursuant to the Receivables Facility, all of our receivables
(but not including receivables of any of our subsidiaries) are sold to Amkor
Receivables Corp. for a discount to their face amount. Amkor Receivables Corp.
has the right to sell an undivided interest in the pool of receivables held by
it to Falcon for an aggregate purchase price not to exceed $100 million at any
one time (subject to eligible receivable and certain other requirements). The
Receivables Facility provides for receivables financings through December 29,
1999. The Receivables Facility has affirmative and negative covenants applicable
to us and our subsidiaries.
We have outstanding $128 million of aggregate principalinitial purchasers of the Convertible
Notes as of November 5, 1999. The holders have the option to convert the
Convertible Notes into our common stock at any time prior to maturity on May 1,
2003 at $13.50 per share. As of August 23, 1999 the closing sale price of our
stock on the Nasdaq National Market was $16.56 per share. We have the right to
redeem the Convertible Notes on or after May 3, 2001 at the redemption prices
specified in the indenture governing the Convertible Notes, conditioned upon the
closing price of our common stock being at or above 125% of the conversion price
of the Convertible Notes for at least 20 trading days within a period of 30
consecutive days ending on the fifth trading day prior to the date we mail the
notice of redemption. The holders of the Convertible Notes will have the right
to require us to repurchase the Convertible Notes following the occurrence of a
change of control or a termination of trading of our common stock.
16
22
THE EXCHANGE OFFERS
PURPOSES OF THE EXCHANGE OFFERSoriginal notes.
In issuing the old Notes,that agreement, we agreed to file a registration statement relating to an
offer to exchange the original notes for the exchange notes. We also agreed to
use our commercially reasonable efforts to cause to become effective ahave the SEC declare that registration
statement with respect toeffective by December 5, 2003. We are offering the exchange notes
under this prospectus in an exchange offer (the "Exchange Offer Registration Statement") on or prior to
December 9, 1999.
We will file withfor the Securities and Exchange Commission (the "SEC") a shelf
registration statement (the "Shelf Registration Statement") if:
(1) the exchange offers are not permitted by applicable law or SEC
policy; or
(2) any holder of old Notes notifies us prior to the 20th day following
the consummation of the exchange offers that:
(a) it is prohibited by law or SEC policy from participating in the
exchange offers; or
(b) it may not resell the new Notes it acquired in the exchange
offers to the public without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration Statement is not appropriate
or available for such resales; or
(c) it is a broker-dealer and owns old Notes acquired directly from
us or one of our affiliates.
The Shelf Registration Statement will cover resales of old Notes by holders who
have provided certain information required by us in connection with the Shelf
Registration Statement.
We are making the exchange offersoriginal notes to satisfy our
obligations under the registration rights agreements into which we entered in connection withRegistration Rights Agreement. We refer to our offer to
exchange the saleexchange notes for the original notes as the "exchange offer."
RESALE OF EXCHANGE NOTES
Based on interpretations of the Old Notes. Once the exchange offers are complete,SEC staff in no-action letters issued to
third parties, we will have no further
obligation to register any of the old Notes not tendered by the holders for
exchange. See "Risk Factors -- Consequences of Not Tendering Old Notes." We
filed a copy of the registration rights agreements as an exhibit to the
registration statement of which this prospectus is a part.
RESALE OF THE NEW NOTES
We believe that new Noteseach exchange note issued in the exchange offers in exchange for old
Notesoffer
may be offered for resale, resold and otherwise transferred by their
holdersyou without
compliance with the registration and prospectus delivery provisionsrequirements of the
Securities Act. Our belief is based on an interpretation byAct if:
- you are not our affiliate within the staffmeaning of Rule 405 under the
SEC set forthSecurities Act,
- you acquire such exchange notes in the staff's Exxon Capital Holdings Corp. SEC
No-Action Letter (available April 13, 1989), Morgan Stanley & Co., Inc. SEC
No-Action Letter (available June 5, 1991), Shearman & Sterling SEC No-Action
Letter (available July 7, 1993), and other no-action letters issued to third
parties. Any holder who is an "affiliate"ordinary course of ours or who intendsyour business,
- you do not intend to participate in the distribution of exchange offersnotes,
and
- you are not a broker-dealer that will receive exchange notes for the purposeyour own
account in exchange for original notes that you acquired as a result of
distributing the new Notes:
(1) cannot rely on the interpretation by the staff of the SEC set forth
in the above referenced no-action letters,
(2) cannotmarket-making activities or other trading activities.
If you tender its old Notesyour original notes in the exchange offer with the intention
of participating in any manner in a distribution of the exchange notes, you:
- cannot rely on such interpretations of the SEC staff, and
(3)- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or transfera secondary resale transaction of
the old Notes, unless such sale or transfer is made pursuant toexchange notes.
Unless an exemption from such requirements.
In addition, eachregistration is otherwise available, the resale by
any security holder intending to distribute exchange notes should be covered by
an effective registration statement under the Securities Act containing the
selling security holder's information required by Item 507 or Item 508, as
applicable, of Regulation S-K under the Securities Act. This prospectus may be
used for an offer to resell, a resale or other retransfer of exchange notes only
as specifically described in this prospectus. Each broker-dealer that holds old Notes acquired for its own
account as a result of market-making or other trading activities (a
"Participating Broker-Dealer") that receives
new Notesexchange notes for its own account in exchange for old Notes notoriginal notes, where that
broker-dealer acquired directly from ussuch original notes as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such new Notes. Seeexchange notes. Please read
"Plan of Distribution."
17
23
Except as described above, this prospectus may not be usedDistribution" for an offer to
resell, resale or othermore details regarding the transfer of new Notes.exchange
notes.
TERMS OF THE EXCHANGE OFFERS
General.OFFER
Upon the terms and subject to the conditions of the exchange offers
described in this prospectus
and in the letter of transmittal, we will accept for exchange any and all old Notes validlyoriginal notes
properly tendered and not withdrawn before 5:00 p.m., New York
City time, onprior to the expiration date.date of the exchange
offer. We will issue $1,000 principal amount of new
Senior Notesexchange notes in exchange for
each $1,000 principal amount of outstanding old
Senior Notes accepted inoriginal notes surrendered under the exchange
offersoffer and $1,000 principal amount of new
Senior Subordinated Notes in exchange for each $1,000 principal amount of old
Senior Subordinated Notes accepted in the exchange offers. You may tender some
or all of your old Notes pursuant to the exchange offers. Old Notesby us. Original notes may be tendered only in integral
multiples of $1,000 principal amount.
As of August 24, 1999, there was $425,000,000$1,000.
The exchange offer is not conditioned on any minimum aggregate principal
amount of original notes being tendered for exchange.
As of the old Senior Notes outstanding and one registered holderdate of old Senior Notes.
Also as of August 24, 1999, there was $200,000,000 aggregatethis prospectus, $425 million principal amount of
the old Senior Subordinated Notesoriginal notes are outstanding. This prospectus and one registered holder of Senior
Subordinated Notes. We are sending this prospectus, together with the letter of transmittal
are being sent to suchall registered holders as of December , 1999.the original notes. There will
14
be no fixed record date for determining registered holders of the original notes
entitled to participate in the exchange offer.
We arrangedintend to conduct the exchange offer in accordance with the provisions
of the Registration Rights Agreement, the applicable requirements of the
Securities Act and the Exchange Act, and the SEC rules and regulations. Original
notes that are not tendered for exchange in the old Notesexchange offer:
- will remain outstanding,
- will continue to accrue interest, and
- will be issuedentitled to the rights and transferable in book-entry
form throughbenefits that holders have under the
facilities of The Depository Trust Company acting as
depositary. The new Notes will also be issuedIndenture relating to the notes and, transferable in book-entry
form through DTC. See "-- Book-Entry Transfer; Delivery and Form."under limited circumstances, the
Registration Rights Agreement.
We will accept validlybe deemed to have accepted for exchange properly tendered old Notes by givingoriginal
notes when we have given oral (confirmed in
writing) or written notice of the acceptance to the
exchange agent.agent and complied with the applicable provisions of the Registration
Rights Agreement. The exchange agent will act as agent for the tendering holders
of old Notes for the purposepurposes of receiving the new Notesexchange notes from us.
If any tendered old Notes are not accepted foryou tender original notes in the exchange because of an
invalid tender, the occurrence of certain other events described in this
prospectus or otherwise, the certificates for any such unaccepted old Notes will
be returned, without expense, to the holder tendering them or the appropriate
book-entry transfer will be made, in each case, as promptly as practicable after
the expiration date.
Youoffer, you will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the letter of transmittal, transfer taxes with respect to the exchange of
old Notes tendered in the exchange offers.original notes. We will pay theall charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. It is
important that you read "The Exchange Offer -- Fees and Expenses" for more
details about fees and expenses incurred in the exchange offer.
We will return any original notes that we do not accept for exchange for
any reason without expense to the tendering holder as promptly as practicable
after the expiration or termination of the exchange offers.
WE ARE NOT MAKING, NOR IS OUR BOARD OF DIRECTORS MAKING, ANY RECOMMENDATION
TO YOU AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF
YOUR OLD NOTES IN THE EXCHANGE OFFERS. FURTHERMORE, NO ONE HAS BEEN AUTHORIZED
TO MAKE ANY SUCH RECOMMENDATION. YOU MUST MAKE YOUR OWN DECISION WHETHER TO
TENDER YOUR OLD NOTES IN THE EXCHANGE OFFERS AND, IF SO, THE AGGREGATE AMOUNT OF
OLD NOTES TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL
AND CONSULTING WITH YOUR ADVISERS, IF ANY, BASED ON YOUR OWN FINANCIAL POSITION
AND REQUIREMENTS.
Expiration Date; Extensions; Amendments.offer.
EXPIRATION DATE
The "expiration date" is January
exchange offer will expire at 5:00 p.m., 1999. InNew York City time, on
, 2003, unless at our sole discretion we may extend eitherthe offer.
EXTENSIONS, DELAY IN ACCEPTANCE, TERMINATION OR AMENDMENT
We expressly reserve the right, at any time or bothat various times, to extend
the period of the exchange
offers, intime during which case the term "expiration date" means the latest date to which
either exchange offer is extended.open. We may delay
acceptance for exchange of any original notes by giving oral or written notice
of the extension to their holders. During any such extensions, all original
notes you have previously tendered will remain subject to the exchange offer for
that series, and we may accept them for exchange.
To extend the expiration date,exchange offer, we will notify the exchange agent and the
record holders of old Notesorally or
in writing of any extension. We also will make a public announcement of the
extension by oral (followed by written)
notice, beforeno later than 9:00 a.m., New York City time, on the next business day
followingafter the previously scheduled expiration date.
We may extend the exchange offer for a
specified period of time or on a daily basis until 5:00 p.m., New York City
time, on the date on which a specified percentage of old Notes are tendered.
18
24
We reserve the right to delay accepting any old Notes, to extend the
exchange offers, to amend the exchange offers or to terminate the exchange
offers and not accept old Notes not previously accepted ifIf any of the conditions described below in "-- Conditions" occurs and isunder "The Exchange
Offer -- Conditions to the Exchange Offer" have not waived. Waiver must be
given bybeen satisfied with respect
to the exchange offer, we reserve the right, at our sole discretion:
- to extend the exchange offer,
- to delay accepting for exchange any original notes, or
- to terminate the exchange offer.
We will give oral (confirmed in writing) or written notice of such extension, delay or termination
to the exchange agentagent. Subject to the terms of the Registration Rights
Agreement, we also reserve the right to amend the terms of the exchange offer in
any manner.
Any such extension, delay in acceptance, termination or amendment will be
followed as promptly as practicable.practicable by oral or written notice thereof to the
registered holders of the original notes. If we amend the exchange offers are amendedoffer in a
manner that we determine to beconstitute a material change, we will promptly
disclose suchthat
15
amendment inby means of a manner
reasonably calculatedprospectus supplement. We will distribute the supplement
to inform the registered holders of such amendment. We will also
extend the exchange offers in such circumstances for a period of five to ten
business days, depending uponoriginal notes. Depending on the significance
of the amendment and the manner of disclosure to the registered holders, ofwe will
extend the old Notes,exchange offer if the exchange offersoffer would otherwise expire during
such fiveperiod.
Without limiting the manner in which we may choose to ten business day period.
Wemake public
announcements of any extension, delay in acceptance, termination or amendment of
the exchange offer, we have no obligation to publish, advertise or otherwise
communicate any such public announcement, of any delay, extension, amendment or termination of the
exchange offers, other than by making a timely release
to an appropriate news agency.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the Dow Jones News
Service. Weexchange offer, we will not be required to
accept for exchange, or exchange any exchange notes for any original notes, and
we may make such announcementterminate the exchange offer as provided in this prospectus before
accepting any original notes for exchange, if in our reasonable judgment:
- the exchange offer, or the making of any exchange by a holder of the
original notes, would violate applicable law or any applicable
interpretation of the SEC staff, or
- any action or proceeding has been instituted or threatened in any additional wayscourt
or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.
In addition, we will not be obligated to accept for exchange the original
notes of any holder that has not made to us:
- the representations described under "The Exchange Offer -- Procedures for
Tendering" and "Plan of Distribution," and
- such other representations as may be reasonably necessary under
applicable SEC rules, regulations or interpretations to make available to
us an appropriate form for registering the exchange notes under the
Securities Act.
We expressly reserve the right to amend or terminate the exchange offer,
and to reject for exchange any original notes not previously accepted for
exchange in the exchange offer, upon the occurrence of any of the conditions to
the exchange offer specified above. We will give oral or written notice of any
extension, non-acceptance, termination or amendment to the holders of the
original notes as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times at our sole discretion.
INTEREST ON THE NEW NOTES AND THE OLD NOTES
The old Senior NotesOur failure at any time to exercise any of these rights will not mean that we
have waived our rights. Each right will be deemed an ongoing right that we may
assert at any time or at various times.
In addition, we will not accept for exchange any original notes tendered,
and old Senior Subordinated Notes will continue to
accrue interest at the rate of 9 1/4% per annum and 10 1/2% per annum,
respectively, through (but not including) the date new Notes are issuedissue exchange notes in exchange for tendered old Notes. Any old Senior Notesany such original notes, if at
such time any stop order has been threatened or old Senior Subordinated
Notes not tenderedis in effect with respect to the
registration statement of which this prospectus constitutes a part or accepted for exchange will continue to accrue interest at
the
rate of 9 1/4% per annum or 10 1/2% per annum, respectively, in accordance
with their terms. From and after the date of issuancequalification of the new Senior Notes
and new Senior Subordinated Notes,Indenture relating to the new Senior Notes and new Senior
Subordinated Notes will accrue interest atnotes under the rateTrust Indenture
Act of 9 1/4% per annum and
10 1/2% per annum, respectively, from the last date to which interest was paid
on the old Notes. Interest on the new Notes and any old Notes not tendered or
accepted for exchange will be payable semi-annually in arrears on March 1 and
November 1 of each year, commencing on November 1, 1999.1939.
PROCEDURES FOR TENDERING
HOW TO TENDER GENERALLY
Only a holder of the original notes may tender such original notes in the
exchange offer. To tender in the exchange offer, youa holder must follow these steps:
(a)either (1) comply
with the procedures for physical tender or (2) comply with the automated tender
offer program procedures of The Depository Trust Company, or "DTC," described
below.
16
To complete a physical tender, a holder must:
- complete, sign and date the letter of transmittal or a facsimile of it;
(b)the
letter of transmittal,
- have the signaturessignature on the letter of transmittal guaranteed if required by
Instruction 3the letter
of transmittal so requires,
- mail or deliver the letter of transmittal or facsimile to the exchange
agent prior to the expiration date, and
- deliver the original notes to the exchange agent prior to the expiration
date or comply with the guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal;transmittal and
(c) mail or otherwise deliver such letter of transmittal or such
facsimile, together with the old Notes and any other required documents at its
address provided above under "The Exchange Agent" prior to the expiration date.
To complete a tender through DTC's automated tender offer program, the
exchange agent before 5:00 p.m., New York City time, onmust receive, prior to the expiration date.
If deliverydate, a timely confirmation
of the old Notes is made through book-entry transfer of such original notes into the exchange agent's account
at DTC you mustaccording to the procedure for book-entry transfer described below or a
properly transmitted agent's message.
The tender by a holder that is not withdrawn prior to the old Notes in accordance
with DTC's Automated Tender Offer Program (ATOP) procedures. See "-- Book-Entry
Transfer; Deliveryexpiration date
and Form."
Yourour acceptance of that tender of old Notes will constitute an agreement between the
holder and us in accordance with the terms and subject to the conditions
set forthdescribed in this prospectus and in the letter of transmittal.
You must deliver all documents for tender to the exchange agent at its
address set forth below. You may also request your brokers, dealers, commercial
banks, trust companies or nominees to effect the above transactions for you.
THE METHOD OF DELIVERY OF CERTIFICATES,ORIGINAL NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR OPTIONELECTION AND YOUR SOLE RISK.
DOCUMENTS ARE
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BYRATHER THAN MAIL THESE ITEMS, WE RECOMMEND REGISTERED MAIL, RETURN RECEIPT REQUESTED, PROPERLY INSURED,THAT YOU USE AN OVERNIGHT OR AN OVERNIGHTHAND
DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO INSURE TIMELY DELIVERY.
19
25
Only a holder of old Notes may tender such old Notes in the exchange offer.
The term "holder" with respect to the exchange offer means any person in whose
name old Notes are registered on our books or any other person who has obtained
a properly completed bond power from the registered holder.ENSURE
DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND
THE LETTER OF TRANSMITTAL OR ORIGINAL NOTES TO US. YOU MAY REQUEST YOUR BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE ABOVE
TRANSACTIONS FOR YOU.
HOW TO TENDER IF YOU ARE A BENEFICIAL OWNER
If your old Notesyou beneficially own original notes that are registered in the name of youra
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender your old
Notes,those notes, you should contact suchthe registered holder promptlyas soon as possible
and instruct suchthe registered holder to tender on your behalf. If your old Notesyou are so registereda
beneficial owner and you wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your old Notes, eitheroriginal
notes, either:
- make appropriate arrangements to register ownership of the old Notesoriginal notes
in your name, or
- obtain a properly completed bond power from the registered holder.holder of your
original notes.
The transfer of recordregistered ownership may take considerable time.
Signaturestime and may not
be completed prior to the expiration date.
SIGNATURES AND SIGNATURE GUARANTEES
You must have signatures on a letter of transmittal or a notice of
withdrawal must bedescribed below under "The Exchange Offer -- Withdrawal of Tenders"
guaranteed by an eligible institution unless the original notes are tendered:
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter
of transmittal, or
- for the account of an eligible institution.
17
An "eligible institution" is a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
U.S. (an "Eligible
Institution"). Signatures do not need to be guaranteed ifUnited States, or an eligible guarantor institution within the old Notes are
tendered (1) bymeaning of Rule
17Ad-15 under the Exchange Act, that is a registered Holder who has not completedmember of one of the box entitled
"Special Payment Instructions" or "Special Delivery Instructions" onrecognized
signature guarantee programs identified in the letter of transmittal or (2) for the account of an Eligible Institution.transmittal.
WHEN ENDORSEMENTS OR BOND POWERS ARE NEEDED
If the letter of transmittal is signed by a person other than the registered holder of any old Notes listed onoriginal notes signs
the letter such old Notesof transmittal, the original notes must be endorsed or accompanied by
appropriatea properly completed bond powers signedpower. The registered holder must sign the bond power
as the name of the registered holder or holdersholder's name appears on the old Notes.original notes. An eligible
institution must guarantee that signature.
If the letter of transmittal or any old Notesoriginal notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact, or
officers of corporations or others acting in a fiduciary or representative
capacity, suchthose persons mustshould so indicate their capacity when signing. Unless waived by us, youwe waive this
requirement, they also must
then submit evidence satisfactory to us of their
authority to so act withdeliver the letter of transmittal.
TENDERING THROUGH DTC'S AUTOMATED TENDER OFFER PROGRAM
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's automated tender offer
program to tender. Accordingly, participants in the program may, instead of
physically completing and signing the letter of transmittal and delivering it to
the exchange agent, transmit their acceptance of the exchange offer
electronically. They may do so by causing DTC to transfer the original notes to
the exchange agent in accordance with its procedures for transfer. DTC will then
send an agent's message to the exchange agent.
An agent's message is a message transmitted by DTC to and received by the
exchange agent and forming part of the book-entry confirmation, stating that:
- DTC has received an express acknowledgment from a participant in DTC's
automated tender offer program that is tendering original notes that are
the subject of such book-entry confirmation,
- the participant has received and agrees to be bound by the terms of the
letter of transmittal, or, in the case of an agent's message relating to
guaranteed delivery, the participant has received and agrees to be bound
by the applicable notice of guaranteed delivery, and
- we may enforce the agreement against such participant.
DETERMINATIONS UNDER THE EXCHANGE OFFER
We will determine inat our sole discretion all questions as to the validity,
form, eligibility, (including time of receipt) andreceipt, acceptance of tendered old
Notesoriginal notes and
withdrawal of tendered old Notes.original notes. Our determination will be final and
binding. We reserve the absolute right to reject any and all old Notesoriginal notes not properly
tendered or any old Notesoriginal notes our acceptance of which, would, in the opinion of our
counsel, might be unlawful for us to accept.unlawful. We also reserve the right to waive any defects,
irregularities or conditions of tenderthe exchange offer as to particular old Notes.original
notes. Our interpretation of the terms and conditions of the exchange offers (includingoffer,
including the instructions in the letter of transmittal)transmittal, will be final and
binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of
old Notesoriginal notes must be cured within such time as we determine. No one isNeither we, the
exchange agent nor any other person will be under any duty to give notification
of defects or irregularities with respect to tenders of old Notes,original notes, nor will
any personwe or those persons incur any liability for failure to give such notification.
Old Notes areTenders of original notes will not properly tenderedbe deemed made until such defects or
irregularities have been cured or waived. Any old Notesoriginal notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the exchange agent to the tendering
holders
of such old Notes,holder, unless otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.
18
WHEN WE WILL ISSUE EXCHANGE NOTES
In all cases, we will issue exchange notes for original notes that we have
accepted for exchange in the exchange offer only after the exchange agent timely
receives:
- original notes or a timely book-entry confirmation of transfer of such
original notes into the exchange agent's account at DTC, and
- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
RETURN OF ORIGINAL NOTES NOT ACCEPTED OR EXCHANGED
If we do not accept any tendered original notes for exchange for any reason
described in the terms and conditions of the exchange offer or if original notes
are submitted for a greater principal amount than the holder desires to
exchange, we will return the unaccepted or non-exchanged original notes without
expense to their tendering holder. In the case of original notes tendered by
book-entry transfer into the exchange agent's account at DTC according to the
procedures described below, such non-exchanged original notes will be credited
to an account maintained with DTC. These actions will occur as promptly as
practicable after the expiration date.
In addition, we reserve the right in our sole discretion:
- to purchase or make offers for any old Notes that remain outstanding after
the expiration date;
- to terminate the exchange offers as described in "-- Conditions"; and
- to the extent permitted by applicable law, purchase old Notes in the open
market, in privately negotiated transactions or otherwise. The terms of
any such purchases or offers could differ from the termstermination of the exchange offers.
20
26offer.
YOUR REPRESENTATIONS TO US
By tendering,signing or agreeing to be bound by the letter of transmittal, you will
represent to us that, among other things, that:things:
- the new Notesany exchange notes you acquire in the exchange offers are being obtainedreceive will be acquired in the ordinary course of
your business;business,
- you have no arrangement or understanding with any person to participate
in the distribution of such new Notes; andthe original notes or the exchange notes within
the meaning of the Securities Act,
- you are not an "affiliate,"our affiliate, as defined underin Rule 405 under the Securities
Act, or, if you are our affiliate, you will comply with the applicable
registration and prospectus delivery requirements of the Securities Act,
- if you are not a broker-dealer, you are not engaged in and do not intend
to engage in the distribution of ours.
Ifthe exchange notes, and
- if you are a Participating Broker-Dealerbroker-dealer that will receive new Notesexchange notes for your own
account in exchange for old Notesoriginal notes that were notyou acquired directly from
us, by tendering you will acknowledge thatas a result of
market-making activities or other trading activities, you will deliver a
prospectus in connection with any resale of such new Notes. See "Plan of Distribution."exchange notes.
BOOK-ENTRY TRANSFER; DELIVERY AND FORMTRANSFER
The old Notes were initially in the form of one or more registered global
notes without interest coupons and were registered in the name of the Depository
Trust Company ("DTC"). The new Notes exchanged for the old Notes represented by
the global old Notes will be represented by global new Notes in fully registered
form, registered in the name of the nominee of DTC.
The global new Notes will be exchangeable for definitive new Notes in
registered form, in denominations of $1,000 principal amount and integral
multiples of $1,000. The new Notes in global form will trade in DTC's same-day
funds settlement system, and therefore secondary market trading activity in the
new Notes will settle in immediately available funds.
We understand that the exchange agent will make a request promptly after the
date of this prospectus to establish an account with respect
to the old Notesoriginal notes at DTC for the purposepurposes of facilitating the exchange offer. Subject tooffer promptly after
the establishmentdate of this account, anyprospectus. Any financial institution that is a participantparticipating in DTC's
system may make book-entry delivery of old Notesoriginal notes by causing DTC to transfer
such old Notes into the exchange agent's account with respect to the
old Notes in accordance with DTC's ATOP procedures for such book-entry
transfers. Although delivery of the old Notes may be effected through book-entry
transferoriginal notes into the exchange agent's account at DTC the exchangein accordance with
DTC's procedures for old Notes so
tendered will be made only after the following two conditionstransfer. If you are met:
- First, DTC must timely confirm (a "Book-Entry Confirmation") such
book-entry transferunable to deliver confirmation of the
old Notesbook-entry tender of your original notes into the exchange agent's account.
- Second, the exchange agent must timely receive a Book-Entry Confirmation
with a message, transmittedaccount at
DTC or all other documents required by DTC and received by the exchange agent and
forming part of the Book-Entry Confirmation, which states that DTC has
received express acknowledgment from a participant tendering old Notes
that such participant has received and agrees to be bound by the terms of the letter of transmittal and that such agreement may be enforced against
such participant.to the exchange
agent on or prior to the expiration date, you must tender your original notes
according to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old Notesoriginal notes but they are not immediately
available or if you cannot deliver your old Notes,original notes, the letter of
transmittal or any other required documents to the exchange agent or comply with
the applicable procedures under DTC's automated tender offer program prior to
the expiration date, you may effect a tender if:
(1)- the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an Eligible Institution;
(2) beforeoffice or
correspondent in the United States, or an eligible guarantor institution,
19
- prior to the expiration date, the exchange agent receives from such
Eligible Institutionmember firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., commercial bank or
trust company having an office or correspondent in the United States, or
eligible guarantor institution either a properly completed and duly
executed notice of guaranteed delivery (byby facsimile transmission, mail or
hand delivery)
setting forth thedelivery or a properly transmitted agent's message and notice of
guaranteed delivery:
- stating your name and address, the registered number(s) of the holder of the old Notes, the
certificate number or numbers of such old Notesyour original
notes and the principal amount of old Notesoriginal notes tendered,
- stating that the tender is being 21
27
made thereby, and
- guaranteeing that, within three New York Stock ExchangeNasdaq trading days after the expiration
date, the letter of transmittal (oror facsimile of such letter)thereof or agent's message
in lieu thereof, together with the certificate(s) representing the
old Notes to be tendered in proper form for transferoriginal notes or a book-entry
confirmation, and any other documents required by the letter of
transmittal or a Book-Entry Confirmation, as the
case may be, will be delivereddeposited by the Eligible Institution toeligible guarantor institution with
the exchange agent; and
(3)agent,
- the exchange agent receives such properly completed and executed letter
of transmittal (oror facsimile of such letter),or agent's message, as well as the certificate(s) representing all tendered
old Notesoriginal notes in proper form for transfer or a book-entry confirmation,
and all other documents required by the letter of transmittal, or a Book-Entry Confirmation, as the
case may be, are received by the exchange agent within
three New York Stock
ExchangeNasdaq trading days after the expiration date.
Upon request ofto the exchange agent, the exchange agent will send a notice
of guaranteed delivery will be
sent to holders whoyou if you wish to tender their old Notesyour original notes
according to the guaranteed delivery procedures set forthdescribed above.
WITHDRAWAL OF TENDERS
Except as otherwise describedprovided in this prospectus, tenders of old Notesyou may be withdrawnwithdraw your
tender at any time beforeprior to 5:00 p.m., New York City time, on the expiration
date.
To withdrawFor a tender of old Notes in the exchange offers,withdrawal to be effective:
- the exchange agent must receive a written or facsimile transmission notice of withdrawal at its address set forth in this prospectus before 5:00 p.m., New York City time,
onone of
the expiration date. See "--addresses listed above under "The Exchange Agent.Agent," or
- the withdrawing holder must comply with the appropriate procedures of
DTC's automated tender offer program.
Any such notice of withdrawal must:
(1)- specify the name of the person having depositedwho tendered the old Notesoriginal notes to be
withdrawn,
(the "Depositor");
(2)- identify the old Notesoriginal notes to be withdrawn, (includingincluding the certificateregistration
number or numbers and the principal amount of such old Notes);
(3)original notes,
- be signed by the holderperson who tendered the original notes in the same
manner as the original signature on the letter of transmittal by which the old Notes were tendered (including
any required signature guarantees)used to
deposit those original notes or be accompanied by documents of transfer
sufficient to havepermit the trustee with respectTrustee to the old Notes register the transfer of the old Notes intoin the name of
the person withdrawing the tender;tender, and
(4)- specify the name in which any the old Notessuch original notes are to be registered, if
different from that of the Depositor.person who tendered the original notes.
If original notes have been tendered under the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn original notes
and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, and eligibility (includingand
time of receipt)receipt of such noticesnotice of withdrawal, and our determination willshall be final
and binding on all parties. Any old NotesWe will deem any original notes so withdrawn will be deemed not to
have been validly tendered for exchange for purposes of the exchange offer and no new Notes
will be issued with respect thereto unless the old Notes so withdrawn are
validly retendered.offer.
20
Any old Notes whichoriginal notes that have been tendered for exchange but whichthat are not
acceptedexchanged for exchangeany reason will be returned to their holder without cost to the
holder, or, in the case of original notes tendered by book-entry transfer into
the exchange agent's account at DTC according to the procedures described above,
such holderoriginal notes will be credited to an account maintained with DTC for the
original notes. This return or crediting will take place as soon as practicable
after withdrawal, rejection of tender or termination of the exchange offer. ProperlyYou
may retender properly withdrawn old Notes may be
retenderedoriginal notes by following one of the
procedures described above under "--"The Exchange Offer -- Procedures for Tendering" at
any time beforeon or prior to 5:00 p.m., New York City time, on the expiration date.
CONDITIONS
NotwithstandingFEES AND EXPENSES
WE WILL BEAR THE EXPENSES OF SOLICITING TENDERS. THE PRINCIPAL SOLICITATION IS
BEING MADE BY MAIL; HOWEVER, WE MAY MAKE ADDITIONAL SOLICITATION BY FACSIMILE,
EMAIL, TELEPHONE OR IN PERSON BY OUR OFFICERS AND REGULAR EMPLOYEES AND THOSE
OF OUR AFFILIATES.
We have not retained any other term of the exchange offers, we will not be
required to accept for exchange, or exchange new Notes for, any old Notes not
accepted for exchange. We may terminate or amend either or both of the exchange
offers as provideddealer-manager in this prospectus before accepting old Notes, if any of the
following conditions exist:
(1) the exchange offers, or the making of any exchange by a holder,
violates applicable law or any applicable interpretation of the SEC;
22
28
(2) any action or proceeding is instituted or threatened in any court or
by or before any governmental agencyconnection with respect to the exchange
offer which, in our sole judgment, might impair our ability to proceed with the
exchange offer;
(3) any law, statute, rule or regulation is adopted or enacted which, in
our sole judgment, might materially impair our ability to proceed with the
exchange offers;
(4) trading on the New York Stock Exchange or generally in the U.S.
over-the-counter market is suspended by order of the SEC or any other
governmental authority which, in our judgment, would reasonably be expected
to impair our ability to proceed with the exchange offers; or
(5) a stop order is issued by the SEC or any state securities authority
suspending the effectiveness of the registration statement or proceedings
are initiated or, to our knowledge, threatened for that purpose.
If any such conditions exist, we may
- refuse to accept any old Notes and return all tendered old Notes to
exchanging holders;
- extend the exchange offers and retain all old Notes tendered prior to the
expiration of the exchange offers, subject, however, to the rights of
holders to withdraw such old Notes (see "-- Withdrawal of Tenders"); or
- waive certain of such conditions with respect to the exchange offers and
accept all properly tendered old Notes which have not been withdrawn or
revoked.
If such waiver constitutes a material change to the exchange offers, we will
promptly disclose such waiver in a manner reasonably calculated to inform
holders of old Notes of such waiver.
The conditions described above are for our sole benefit. We may assert any
condition regardless of the circumstances giving rise to any such condition. We
may waive any condition in whole or in part at any time and from time to time in
our sole discretion. We are not waiving these rights by failing to exercise
them. These rights are ongoing and may be asserted at any time and from time to
time.
EXCHANGE AGENT
We appointed State Street Bank and Trust Company as exchange agent for the
exchange offers. Send letters of transmittal and notices of guaranteed delivery
to the exchange agent addressed as follows:
By Mail/Hand Delivery or Overnight Delivery:
State Street Bank and Trust Company
Attn: Ralph Jones, Corporate Actions
2 Avenue De Lafayette
Fifth Floor, Corporate Trust Window
Boston, Massachusetts 02111
By Facsimile: (617) 662-1452
To Confirm by telephone: (617) 662-1548
FEES AND EXPENSES
We will pay the expenses of soliciting tenders. The principal solicitation
is being made by mail. Additional solicitation may be made by telegraph,
telephone or in person by officers and regular employees of ours and our
23
29
affiliates and by persons so engaged by the exchange agent. Also, we have
retained Skinner & Co. to assist us in soliciting tenders. The contact
information for the solicitor is as follows:
Skinner & Co.
Attn: Mike McReynolds
225 South Cabrillo Hwy.
Suite 206C
Half Moon Bay, CA 94019-173
By Facsimile: (650) 712-3933
To Confirm by telephone: (650) 712-3939
We will not make any payments to other brokers, dealersbroker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent and solicitor
reasonable and customary fees for theirits services and will reimburse it for its related
reasonable out-of-pocket expenses in connection therewith.expenses. We may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus, letters of transmittal
and related documents to the beneficial owners of the old Notes,original notes and in
handling or forwarding tenders for exchange.
We will pay the cash expenses to be incurred in connection with the
exchange offers. We estimate these cash expenses will aggregate approximately $150,000,
includingoffer. They include:
- SEC registration fees for the exchange notes,
- fees and expenses of the exchange agent and the trustee under the
indenture, the solicitor andTrustee,
- accounting and legal fees.fees,
- printing costs, and
- related fees and expenses.
TRANSFER TAXES
If you tender your original notes for exchange, you will not be required to
pay any transfer taxes. We will pay all transfer taxes, if any, applicable to
the exchange of old
Notesoriginal notes in the exchange offers.offer. The amount oftendering holder will,
however, be required to pay any such transfer taxes, (whetherwhether imposed on the
registered holder or any other persons) will be payable by the
tendering holderperson, if:
(1)- certificates representing new Notesexchange notes or old Notesoriginal notes for principal
amounts at maturity not tendered or accepted for exchange are to be delivered to, or
are to be registeredissued in the name of, any person other than the registered
holder of the old Notes tendered;
(2)original notes tendered,
old Notes- tendered original notes are registered in the name of any person other
than the person signing the letter of transmittal;transmittal, or
(3)- a transfer tax is imposed for any reason other than the exchange of
old Notesoriginal notes for exchange notes in the exchange offers.
In such circumstances, you must submitoffer.
If satisfactory evidence of payment of suchany transfer taxes or exception from such taxespayable by a
tendering holder is not submitted with the letter of transmittal, or the amount of
such transfer taxes will be billed directly to you.
ACCOUNTING TREATMENTthat tendering holder. The
new Notesexchange agent will be recorded atretain possession of exchange notes with a face amount equal
to the same carrying valueamount of the transfer taxes due until it receives payment of the taxes.
21
CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not exchange your original notes for exchange notes in the
exchange offer, you will remain subject to the existing restrictions on transfer
of the original notes. In general, you may not offer or sell the original notes
unless either they are registered under the Securities Act or the offer or sale
is exempt from or not subject to registration under the Securities Act and
applicable state securities laws. Except as required by the old Notes,
which is face value as reflected in our accounting records onRegistration Rights
Agreement, we do not intend to register resales of the dateoriginal notes under the
Securities Act. We have no obligation to re-offer to exchange the exchange notes
for original notes following the expiration of the exchange offers. Accordingly, no gain or loss for accounting purposesoffer.
The tender of original notes in the exchange offer will be
recognized upon completionreduce the
outstanding principal amount of the exchange offers. The issuance costs incurredoriginal notes. Due to the corresponding
reduction in connection withliquidity, this may have an adverse effect on, and increase the
volatility of, the market price of any original notes that you continue to hold.
OTHER
Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your decision on what action to take. In the future, we may
seek to acquire untendered original notes in open market or privately negotiated
transactions, through subsequent exchange offers will be capitalized and amortized overor otherwise. We have no
present plan to acquire any original notes that are not tendered in the termexchange
offer or to file a registration statement to permit resales of any untendered
original notes, except as required by the new Notes.
24
30Registration Rights Agreement.
DESCRIPTION OF THE NOTES
GENERAL
The new Senior NotesYou can find the definitions of certain terms used in this description
under the caption "-- Certain Definitions." In this description, the word
"Amkor" refers only to Amkor Technology, Inc. and not to any of its Subsidiaries
and the term "Notes" refers to both the original notes and the exchange notes.
Amkor will be issued pursuant to a Senior Notesissue the exchange notes under the Indenture (the "Indenture")
between the Companyitself and State StreetU.S. Bank and Trust Company,National Association, as trustee.trustee (the "Trustee").
The terms of the new Senior Notes include those stated in the Senior Notes Indenture
and those made part of the Senior Notes Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The new Senior
Subordinated Notes will be issued pursuant to a Senior Subordinated Notes
Indenture between the Company and State Street Bank and Trust, as trustee. The
terms of the new Senior Subordinated Notes include those stated in the Senior
Subordinated Notes Indenture and those made part
of the Indenture by reference to the Trust Indenture Act.Act of 1939.
The new Notes are subject to all such terms, and
holders of new Notes are referred to the Senior Notes Indenture, the Senior
Subordinated Notes Indenture and the Trust Indenture Act forfollowing description is a statement of such
terms.
The following summary of the material provisions of the
Senior Notes
Indenture, the Senior Subordinated Notes Indenture, the Senior Notes
Registration Rights Agreement and the Senior Subordinated Notes Registration
Rights AgreementIndenture. It does not purport to be complete and is qualifiedrestate that agreement in its entirety by referenceentirety. We urge you to
such agreements, includingread the definitions in those
agreementsIndenture because it, and not this description, defines your rights as
holders of certain terms used below.the Notes. Copies of such agreements have been
filedthe Indenture are available as exhibits to our Quarterly Report on Form 10-Q fordescribed below
under the quarter ended
March 31, 1999, which has been incorporated by reference in this prospectus and
is available from the SEC or as set forth undercaption "Available Information."
The
definitions of certain terms used in the following summary are set forth below
under "-- Certain Definitions."
For purposes of the following summary, the term "Company" refers only to
Amkor Technology, Inc. and not to any of its Subsidiaries, the term "Senior
Notes" refers to the old and new Senior Notes, the term Senior Subordinated
Notes refers to the old and new Senior Subordinated Notes and the term "Notes"
refers to the old and new Notes.
DESCRIPTION OF THE SENIOR NOTES
RANKING
The Senior Notes:
N areNotes are:
- general obligations of the Company;
N areAmkor;
- effectively subordinated in right of payment to existing and future
secured debt, if any, including our obligations under our secured bank
facilities, to the extent of such security, and to all existing and
future debt and other liabilities of our subsidiaries, including trade
payables;
N are- equal in right of payment with all of our existing and future unsecured
senior debt;
N aredebt, including our 9.25% senior notes due February 15, 2008; and
- senior in right of payment to all of our existing and future debt that
expressly provides that it is subordinated to the Senior Notes, including the
Senior Subordinatedour
10.50% senior subordinated notes due 2009, our 5.75% convertible
subordinated notes due 2006 and our 5.00% convertible subordinated notes
due 2007.
The Notes and the Convertible Notes and are "Designated Senior Debt" for purposes of the indentureindentures
governing our 10.50% senior subordinated notes due 2009, our 5.75% convertible
subordinated notes due 2006 and our 5.00% convertible subordinated notes due
2007.
22
Assuming we had completed the Convertible Notes.
AsMay 2003 note offering to which this exchange
offer relates, redeemed our 9.25% senior notes due 2006, closed our new senior
secured credit facility and repaid the Term B loan under our previous senior
secured credit facility with the proceeds of September 30, 1999, the Companynew senior secured credit
facility, as if each occurred as of March 31, 2003, Amkor would have had total
senior secured debt of approximately $13.5 million.$170 million on that date. In addition, our Subsidiariessubsidiaries
would have had total liabilities of approximately $242.1 million.272.6 million, including trade
payables but excluding intercompany obligations. The Senior Notes Indenture will permit us to
incur additional senior secured debt.debt and subsidiary indebtedness.
We conduct a large portion of our operations through our Subsidiaries.
Accordingly, our ability to meet our cash obligations is dependent upon the
ability of our Subsidiaries to make cash distributionspayments to us. DividendsPayments from our
Subsidiaries are expected to be a large source of funds for payment of interest
on the Senior Notes. The claims of creditors (including trade creditors) of any
Subsidiary will generally have priority as to the assets 25
31
of such Subsidiary over
the claims of the holders of the Senior Notes. In the event of a liquidation of any of
our Subsidiaries, our right to receive the assets of any such Subsidiary (and
the resulting right of the Holdersholders of the
Senior Notes to participate in the
distribution of the proceeds of those assets) will effectively be subordinated
by operation of law to the claims of creditors (including trade creditors) of
such Subsidiary and holders of such Subsidiary's preferred stock and any
Guarantees by such Subsidiary of Indebtedness of the
Company.Amkor. If the CompanyAmkor were a creditor
of such Subsidiary or a holder of its preferred stock, we would be entitled to
participate in the distribution of the proceeds of such Subsidiary's assets. Our
claims would, however, remain subordinate to any Indebtedness or preferred stock
of such Subsidiary whichthat is senior in right of payment to the Indebtedness or
preferred stock held by us. In the event of the liquidation, bankruptcy,
reorganization, insolvency, receivership or similar proceeding or any assignment
for the benefit of our creditors or a marshaling of our assets or liabilities,
Holdersholders of the Senior Notes may receive ratably less than other such creditors or
interest holders.
As of the date of this prospectus,the Indenture, all of our Subsidiaries arewill be "Restricted
Subsidiaries." However, under the circumstances described below under the
subheadingcaption "-- Certain Covenants -- Designation of Restricted and Unrestricted
Subsidiaries," we will be permitted to designate certain of our Subsidiaries as
"Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants in the Senior Notes Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Senior Notes Indenture is limited in aggregate principal amount to
$525.0 million of which $425.0 million was issued in the offering on May 13,
1999, and will mature on May 1, 2006. The Senior Notes Indenture provides for
the issuance of up to an additional $100.0 million aggregate principal amount of
additional notes having identical terms and conditions as the Senior Notes
offered hereby (the "Additional Senior Notes"), subject to the limitations set
forth under "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock." Any Additional Senior Notes will be part of the same issue of
Senior Notes issued on May 13, 1999 and will vote on all matters with the Senior
Notes issued on May 13, 1999. For purposes of this "Description of Notes,"
references to the Senior Notes do not include Additional Senior Notes.15, 2013.
Interest on the Senior Notes will accrue at the rate of 9 1/4%7.75% per annum and will
be payable semi-annuallysemiannually in arrears on May 115 and November 1,15, commencing on
November 1, 1999. The Company15, 2003. Amkor will make each interest payment to the Holders of
record of the Senior Notes on the immediately preceding April 15May 1 and October 15.November 1.
Interest on the Senior Notes will accrue from the date of original issuance or, if
interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The interest rate on the Senior Notes will beis subject to increase if theAmkor does not
file a registration statement of which this prospectus forms a part relating to the Exchange Offerexchange offer on a timely basis,
if the registration statement is not declared effective on a timely basis or if
certain other conditions are not satisfied, all as further described under the
caption "Provisions Common to Both Senior Notes and Senior Subordinated
Notes -- Registration"Registration Rights; Liquidated Damages."
All references to interest on the Senior Notes include any such Liquidated Damages
that may be payable. The
Company issued the old Senior Notes in denominations of $1,000 and integral
multiples of $1,000 andAmkor will issue the new Senior Notes also in denominations of $1,000 and
integral multiples of $1,000.
OPTIONAL REDEMPTION
At any time prior to May 1, 2003,Except as set forth below, the Company may redeem all or a part of
the Senior Notes, upon not less than 30 nor more than 60 days prior notice, at a
redemption price (expressed as a percentage of principal
26
32
amount) equal to 100% of the principal amount thereof plus the Applicable
Premium, if any, plus accrued and unpaid interest thereon, if any, to the
applicable date of redemption.
The "Applicable Premium" of any redeemed Senior Note equals the excess of:
(1) the present value at the date of redemption of 100% of the principal amount
of such Senior Note plus all required interest payments due on such Senior
Note through its Stated Maturity date (excluding accrued but unpaid
interest), calculated using a discount rate equal to the Treasury Rate plus
50 basis points; over
(2) the principal amount of the Senior Note, if greater.
If the period from the date of redemption to the Stated Maturity date is
greater than one year, the "Treasury Rate" will be equal to the yield to
maturity as of such date of redemption of United States Treasury securities with
a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at
least two business days prior to the date of redemption (or, if such Statistical
Release is no longer published, any publicly available source of similar market
data)) most nearly equal to the period from the date of redemption to the Stated
Maturity date.
If the period from the date of redemption to the Stated Maturity date is
less than one year, the "Treasury Rate" will be equal to the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year.
Except pursuant to the preceding paragraph, the Senior Notes will not be redeemable at the Company's option
of Amkor prior to May 1, 2003.
On or after May 1, 2003, the Company15, 2008. Starting on that date, Amkor may redeem all or
a partany portion of the Senior
Notes, upon not less than 30 nor more than 60 days'at once or over time, after giving the required notice
under the Indenture. The Notes may be redeemed at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest thereon,and Liquidated Damages, if any, to
the applicable redemption date if(subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest
23
payment date). The following prices are for Notes redeemed during the twelve-month12-month
period beginningcommencing on May 115 of the years indicated below:set forth below, and are expressed as
percentages of principal amount:
REDEMPTION YEAR PERCENTAGE
---- ----------PRICE
- --------------- -------
2003...................................................... 104.625%
2004...................................................... 102.313%
20052008........................................................ 103.875%
2009........................................................ 102.583%
2010........................................................ 101.292%
2011 and thereafter.......................................thereafter......................................... 100.000%
REPURCHASE AT THE OPTION OF HOLDERS
Change of ControlOFFER TO REPURCHASE UPON CHANGE OF CONTROL
If a Change of Control occurs, each Holderholder of Seniorthe Notes will have the right
to require the CompanyAmkor to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of that Holder's Seniorholder's Notes pursuant to the
Changean offer made by Amkor (the
"Change of Control Offer.Offer"). In the Change of Control Offer, the CompanyAmkor will offer to
make a Changepayment (the "Change of Control PaymentPayment" in cash equal to 101% of the
aggregate principal amount of Senior Notes repurchased, plus accrued and unpaid
interest thereon and Liquidated Damages, if any, to the date of purchase. Within
30 days following any Change of Control, the CompanyAmkor will mail a notice to each Holderholder
of Seniorthe Notes describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Senior Notes on the date specified in such
notice (the "Change of Control Payment Date"), pursuant to the procedures
required by the Senior Notes
Indenture and described in such notice. The CompanyAmkor will comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Senior Notes as a result of a
Change of Control.
On the Change of Control Payment Date, the CompanyAmkor will, to the extent lawful:
(1) accept for payment all Senior Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
27
33
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Senior Notes or portions thereof so tendered;
and
(3) deliver or cause to be delivered to the Senior Notes Trustee the Senior Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Senior Notes or portions thereof being purchased by the Company.Amkor.
The Paying Agent will promptly mail to each Holderholder of Seniorthe Notes so tendered
the Change of Control Payment for such Senior Notes, and the Senior
Notes Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holderholder
a new Senior Note equal in principal amount to any unpurchased portion of the Senior Notes
surrendered, if any; provided that each such new Senior Note will be in a principal
amount of $1,000 or an integral multiple thereof.
The CompanyAmkor will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the CompanyAmkor to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether or not any other provisions of the Senior Notes Indenture are applicable. Except as
described above with respect to a Change of Control, the Senior Notes Indenture does not
contain provisions that permit the Holdersholders of the Senior Notes to require that the CompanyAmkor
repurchase or redeem the Senior Notes in the event of a takeover, recapitalization or
similar transaction.
The CompanyAmkor will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in the
Senior Notes Indenture applicable to a Change of Control Offer made by the CompanyAmkor and purchases
all Senior Notes validly tendered and not withdrawn under such Change of Control Offer.
24
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the CompanyAmkor and its Subsidiaries taken as a whole. Although there is
a limited body of case law interpreting the phrase "substantially all," there is
no precise established definition of the phrase under applicable law.
Accordingly, the ability of a Holderholder of Seniorthe Notes to require the CompanyAmkor to repurchase
such Senior Notes as a result of a sale, lease, transfer, conveyance or other
disposition of less than all of the assets of the CompanyAmkor and its Subsidiaries taken as a
whole to another Person or group may be uncertain.
Asset Sales
The CompanyOFFER TO REPURCHASE BY APPLICATION OF EXCESS PROCEEDS OF ASSET SALES
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:
(1) the CompanyAmkor (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or otherwise
disposed of;
(2) such fair market value is determined by the Company's Board of Directors;
and
(3) at least 75% of the consideration therefor received by the CompanyAmkor or
such Restricted Subsidiary is in the form of cash or other Qualified
Proceeds.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the CompanyAmkor may apply such Net Proceeds at its option:
(1) to repay Permitted Bank Debt, and if such Permitted Bank Debt is
revolving debt, to effect a corresponding commitment reduction thereunder;
(2) to acquire all or substantially all of the assets of, or a majority
of the Voting Stock of, another Permitted Business;
28
34
(3) to make a capital expenditure; or
(4) to acquire any other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any such Net Proceeds, the CompanyAmkor may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Senior Notes Indenture.
Any Net Proceeds from any Asset Sale that are not applied or invested as
provided in the preceding paragraph within 365 days of such Asset Sale will
constitute Excess Proceeds."Excess Proceeds". When the aggregate amount of Excess Proceeds
exceeds $10.0$10 million, the CompanyAmkor will make an Assetoffer (the "Asset Sale OfferOffer") to all
Holdersholders of Seniorthe Notes and all holders of other Indebtedness that is pari passu
with the Senior Notes containing provisions similar to those set forth in the Senior
Notes Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets to purchase the maximum principal amount of Senior Notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer will be equal to 100% of principal amount plus
accrued and unpaid interest, if any, to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the CompanyAmkor may use such Excess Proceeds for any purpose not otherwise
prohibited by the Senior Notes Indenture. If the aggregate principal amount of Senior Notes and such
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Senior Notes Trustee shall select the Senior Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Selection and Notice
If less than all of the Senior Notes are to be redeemed at any time, the
Senior Notes Trustee will select Senior Notes for redemption as follows:
(1) if the Senior Notes are listed, in compliance with the requirements of the
principal national securities exchange on which the Senior Notes are listed;
or
(2) if the Senior Notes are not so listed, on a pro rata basis, by lot or by
such method as the Senior Notes Trustee shall deem fair and appropriate.
No Senior Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Senior Notes to be redeemed at
its registered address. Notices of redemption may not be conditional.
If any Senior Note is to be redeemed in part only, the notice of redemption
that relates to that Senior Note shall state the portion of the principal amount
thereof to be redeemed. A new Senior Note in principal amount equal to the
unredeemed portion of the original Senior Note will be issued in the name of the
Holder thereof upon cancellation of the original Senior Note. Senior Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest ceases to accrue on Senior Notes or portions of
them called for redemption.25
CERTAIN COVENANTS
Restricted Payments
The CompanyRESTRICTED PAYMENTS
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company'sAmkor's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in connection
with any merger or consolidation involving the CompanyAmkor or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the Company'sAmkor's or any of its
Restricted Subsidiaries' Equity Interests in their
29
35 capacity as such (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the CompanyAmkor or to the CompanyAmkor or a Restricted Subsidiary of
the Company)Amkor);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company)Amkor) any Equity Interests of the CompanyAmkor or any direct
or indirect parent of the CompanyAmkor or any Restricted Subsidiary of the CompanyAmkor (other
than any such Equity Interests owned by the CompanyAmkor or any Restricted Subsidiary
of the Company)Amkor);
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Senior Notes, including the Senior Subordinated Notes, except a payment of interest or principal at the
Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) the CompanyAmkor would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Interest Expense Coverage Ratio test set forth in the first
paragraph of the covenant described below under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock";
and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the CompanyAmkor and its Restricted Subsidiaries
after the date of the Senior Notes IndentureIssue Date (excluding Restricted Payments permitted by clauses
(2), (3), (4), (7) and (9) of the next succeeding paragraph), is less than
the sum, without duplication, ofof:
(a) 50% of the Consolidated Net Income of the CompanyAmkor for the period
(taken as one accounting period) from the beginning of the first
fiscal
quarter commencing after the date of the Senior Notes
Indentureon April 1, 2003 to the end of the Company'sAmkor's most recently
ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus
(b) 100% of the aggregate net cash proceeds received by the CompanyAmkor since
the date of the Senior Notes IndentureIssue Date as a contribution to its common equity capital or from
the issue or sale of Equity Interests of the CompanyAmkor (other than Disqualified
Stock) (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of the Company)Amkor), plus
(c) to the extent that any Restricted Investment that was made
after the date of the Senior Notes IndentureIssue Date is sold for cash or otherwise liquidated or repaid
for cash, the lesser of (i) the cash return of capital with respect to
such Restricted Investment (less the cost of disposition, if any) and
(ii) the initial amount of such Restricted Investment, plus
(d) the amount by which (i) Indebtedness (other than Disqualified
Stock) of the CompanyAmkor or any Restricted Subsidiary issued after the Issue Date
is reduced on the Company'sAmkor's consolidated balance sheet (if prepared in
accordance with GAAP as of the date of determination) and (ii)
Disqualified Stock
26
of the CompanyAmkor issued after the Issue Date (held by any Person other than any
Restricted Subsidiary) is reduced (measured with reference to its
redemption or repurchase price), in each case, as a result of the
conversion or exchange of any such Indebtedness or Disqualified Stock
into Equity Interests (other than Disqualified Stock) of the
30
36
Company,Amkor, less, in
each case, any cash distributed by the CompanyAmkor upon such conversion or
exchange, plus
(e) to the extent that any Investment in any Unrestricted
Subsidiary that was made after the date of the Senior Notes IndentureIssue Date is sold for cash or
otherwise liquidated, repaid for cash or such Unrestricted Subsidiary is
converted into a Restricted Subsidiary, the lesser of (i) an amount
equal to the sum of (A) the net reduction in Investments in Unrestricted
Subsidiaries resulting from dividends, repayments of loans or advances
or other transfers of assets, in each case to the CompanyAmkor or any Restricted
Subsidiary from Unrestricted Subsidiaries, and (B) the fair market value
of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary, and (ii)
the remaining amount of the Investment in such Unrestricted Subsidiary
which has not been repaid or converted into cash or assets.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration no Default has occurred
and is continuing or would be caused thereby and such payment would have
complied with the provisions of the Senior Notes Indenture;
(2) the making of any payment on or with respect to, or in connection
with, the redemption, repurchase, retirement, defeasance or other
acquisition of, any Indebtedness of the CompanyAmkor or any Restricted Subsidiary that
is subordinated to the Senior Notes or of any Equity Interests of the CompanyAmkor or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)Amkor) of,
Equity Interests (other than Disqualified Stock) of the
CompanyAmkor or any
subordinated Indebtedness of the Company that is subordinated to the
Senior Notes;Amkor; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(3)(b) of the preceding paragraph;
(3) the making of any payment on or with respect to, or in connection
with, the defeasance, redemption, repurchase or other acquisition of
Indebtedness of the CompanyAmkor or any Restricted Subsidiary that is subordinated to
the Senior Notes with the net cash proceeds from the incurrence of Permitted
Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the CompanyAmkor to
the holders of its common Capital Stock on a pro rata basis;
(5) so long as no Default has occurred and is continuing or would be
caused thereby, the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the CompanyAmkor or any Restricted
Subsidiary of the CompanyAmkor held by any employee of the CompanyAmkor or any Restricted
Subsidiary pursuant to any employee equity subscription agreement, stock
ownership plan or stock option agreement in effect from time to time;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $2.0$2 million in any
twelve-month period and $10.0$10 million in the aggregate;
(6) the making of any payment on or with respect to, or repurchase,
redemption, defeasance or other acquisition or retirement for value of the
Convertible
Notes5.75% subordinated convertible notes due 2006 or the 5% subordinated
convertible notes due 2007 in connection with (i) so long as no Event of
Default has occurred and is continuing or would be caused thereby, an
optional redemption of the
Convertible Notessuch convertible notes on or after May 3, 2001 pursuant to the terms thereof,dates such
notes become redeemable, or (ii) the honoring by the CompanyAmkor of any conversion
request into Capital Stock (other than Disqualified Stock) by a holder of
the Convertible Noteseither such convertible notes or any future convertible notes of Amkor
(including the payment by the CompanyAmkor of any cash in lieu of fractional shares)
in accordance with their terms;
27
(7) that portion of Investments the payment for which consists
exclusively of Equity Interests (other than Disqualified Stock) of the Company;
31
37Amkor;
(8) so long as no Default has occurred and is continuing or would be
caused thereby, other Restricted Payments in an aggregate amount not to
exceed $25.0$25 million;
(9) the repurchase of Equity Interests of the CompanyAmkor that may be deemed to
occur upon the exercise of stock options if such Equity Interests represent
a portion of the exercise price thereof;
(10) any payments to one or more shareholdersstockholders of the CompanyAmkor in connection
with settling shareholderstockholder obligations for income taxes in respect of tax
periods ending prior to the conversion of the CompanyAmkor from "S" corporation status
to "C" corporation status;
(11) in the case of an Asset Sale, any Asset Sale Offer after the CompanyAmkor
has complied with its obligations to the Holdersholders of the Senior Notes under the
"Asset Sale" covenant contained in the Senior Notes Indenture; and
(12) in the case of a Change of Control, any Change of Control Offer
to repurchase the Senior Subordinated Notessenior subordinated notes after the CompanyAmkor has complied with
its obligations to the Holdersholders of the Senior Notes under the "Change of Control"
covenant contained in the Senior Notes Indenture.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s)assets or securities
proposed to be transferred or issued by the CompanyAmkor or such Restricted Subsidiary, as
the case may be, pursuant to the Restricted Payment. The fair market value of
any assets or securities that are required to be valued by this covenant with a
fair market value in excess of $1.0$1 million but less than $5.0$5 million shall be
evidenced by an Officer's Certificate which shall be delivered to the Senior Notes Trustee.
The fair market value of any assets or securities that are required to be valued
by this covenant with a fair market value in excess of $5.0$5 million shall be
determined by the Board of Directors whose resolution with respect thereto shall
be delivered to the Senior Notes Trustee.
Incurrence of Indebtedness and Issuance of Preferred Stock
The CompanyINCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
CompanyAmkor
will not issue any Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that
the CompanyAmkor and any Restricted Subsidiary that is a Guarantor may incur Indebtedness
(including Acquired Debt), and the CompanyAmkor may issue Disqualified Stock, and any
Restricted Subsidiary that is a Guarantor may issue preferred stock, if the
Consolidated Interest Expense Coverage Ratio for the
Company'sAmkor's most recently ended
four full fiscal quarters (the "Reference Period") for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.5 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the CompanyAmkor and any Restricted Subsidiary of any
Permitted Bank Debt; provided that the aggregate principal amount of all
Permitted Bank Debt at any one time outstanding shall not exceed $100.0$100
million plus 85% of the consolidated accounts receivable of the CompanyAmkor plus 50%
of the consolidated inventory of the Company;Amkor;
(2) the incurrence by the CompanyAmkor and its Subsidiaries of Existing
Indebtedness;
32
38
(3) the incurrence by the CompanyAmkor and any Guarantor of Indebtedness
represented by the Senior Notes, the Senior Subordinated Notes, and any Subsidiary Guarantees;
28
(4) the incurrence by the CompanyAmkor or any of its Restricted Subsidiaries of
(a) Indebtedness incurred for the purpose of financing all or any part of
the purchase price or cost of construction or improvement of property,
plant or equipment used in the business of the CompanyAmkor or such Restricted
Subsidiary and (b) Capital Lease Obligations, in an aggregate amount at any
time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed 10% of the Company'sAmkor's Consolidated Net Assets;
(5) the incurrence by the CompanyAmkor or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by the Senior Notes Indenture to be
incurred under the first paragraph of this covenant or clausesclause (2), (3),
(5), (13) or (14) of this paragraph;
(6) the incurrence by the CompanyAmkor or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the CompanyAmkor and any of its Restricted
Subsidiaries; provided, however, that:
(a) if the CompanyAmkor or any Guarantor is the obligor on such Indebtedness
and such Indebtedness is in favor of a Restricted Subsidiary other than
a Wholly Owned Restricted Subsidiary, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Senior Notes, in the case of the Company,Amkor, or the
Senior
Subsidiary Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than
the CompanyAmkor or a Wholly Owned Restricted Subsidiary thereof and (ii) any sale
or other transfer of any such Indebtedness to a Person that is not
either the CompanyAmkor or a Wholly Owned Restricted Subsidiary thereof;thereof shall be
deemed, in each case, to constitute an incurrence of such Indebtedness
by the CompanyAmkor or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the incurrence by the CompanyAmkor or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate, commodity or currency risk in the ordinary course of
business for bona fide hedging purposes; provided that the notional
principal amount of any such Hedging Obligation with respect to interest
rates does not exceed the amount of Indebtedness or other liability to
which such Hedging Obligation relates;
(8) the Guarantee by the CompanyAmkor or any of the Guarantors of Indebtedness of
the CompanyAmkor or a Restricted Subsidiary of the CompanyAmkor that was permitted to be incurred
by another provision of this covenant;
(9) the incurrence by the Company'sAmkor's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the CompanyAmkor that was not permitted by this clause (9);
(10) the incurrence of Indebtedness solely in respect of performance,
surety and similar bonds or completion or performance Guarantees, to the
extent that such incurrence does not result in the incurrence of any
obligation for the payment of borrowed money to others;
(11) the incurrence of Indebtedness arising from the agreements of
the CompanyAmkor or a Restricted Subsidiary of the CompanyAmkor providing for indemnification,
adjustment of purchase price or similar obligations, in each
33
39 case, incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary; provided, however, that:
(a) such Indebtedness is not reflected as a liability on the
balance sheet of the CompanyAmkor or any Restricted Subsidiary of the Company;Amkor; and
(b) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds, including
non-cash proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any
subsequent changes in
29
value), actually received by the CompanyAmkor and its Restricted Subsidiaries in
connection with such disposition;
(12) the accrual of interest, accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock; provided, in each such case, that the amount thereof is
included in Consolidated Interest Expense of the CompanyAmkor as accrued;
(13) the incurrence of Indebtedness by Foreign Subsidiaries in an
amount not to exceed 10% of the Total Tangible Assets of the Foreign
Subsidiaries, taken as a whole; and
(14) the incurrence by the CompanyAmkor or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (14), not to exceed $25.0$25
million.
Indebtedness or preferred stock of any Person whichthat is outstanding at the
time such Person becomes a Restricted Subsidiary of the CompanyAmkor (including upon
designation of any Subsidiary or other Person as a Restricted Subsidiary) or is
merged with or into or consolidated with the CompanyAmkor or a Restricted Subsidiary of
the CompanyAmkor shall be deemed to have been incurred at the time such Person becomes such
a Restricted Subsidiary of the CompanyAmkor or is merged with or into or consolidated with
the CompanyAmkor or a Restricted Subsidiary of the Company,Amkor, as applicable.
The CompanyAmkor will not incur any Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of
the CompanyAmkor unless such Indebtedness is also contractually subordinated in right of
payment to the Senior Notes on substantially identical terms; provided, however, that
no Indebtedness of the CompanyAmkor shall be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the CompanyAmkor solely by virtue of any
Liens, Guarantees, maturity of payments or structural seniority.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (14) above, or is
entitled to be incurred pursuant to the first paragraph of this covenant, the CompanyAmkor
will, be permitted
toat its sole discretion, classify or reclassify such item of Indebtedness
(or any part thereof) in any manner that complies with this covenant, and such
item of Indebtedness shall be treated as having been incurred pursuant to only
one of such clauses or pursuant to the first paragraph of this covenant.
For purposes of determining any particular amount of Indebtedness under
this covenant, Guarantees, Liens or obligations in support of letters of credit
supporting Indebtedness shall not be included to the extent such letters of
credit are included in the amount of such Indebtedness.
Any increase in the amount of any Indebtedness solely by reason of currency
fluctuations shall not be considered an incurrence of Indebtedness for purposes
of this covenant.
34
40
Liens
The CompanyLIENS
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind securing Indebtedness on any asset now owned or hereafter acquired, except
Permitted Liens, unless the Notes are equally and ratably secured with the
obligations so secured for as long as such Indebtedness will be so secured.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Company30
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to the
CompanyAmkor or any of the Company'sAmkor's Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the CompanyAmkor or any of the Company'sAmkor's Restricted Subsidiaries;
(2) make loans or advances to the CompanyAmkor or any of the Company'sAmkor's Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the CompanyAmkor or any of
the
Company'sAmkor's Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Senior Notes
Indenture
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof,thereof; provided
that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacementreplacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Existing Indebtedness, as
in effect on the date of the Senior Notes Indenture;
(2) the IndenturesIndenture and the Notes;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the CompanyAmkor or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired,acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture
to be incurred;
(5) customary non-assignmentnonassignment provisions in leases, licenses or other
contracts entered into in the ordinary course of business and consistent
with past practices;
(6) purchase money obligations or Capital Lease Obligations for
property acquired in the ordinary course of business that impose
restrictions on the property so acquired of the nature described in clause
(3) of the preceding
paragraph;first paragraph of this section;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts dividends, distributions, loans, advances or
transfers by such Restricted Subsidiary pending its sale or other
disposition;
35
41
(8) Permitted Refinancing Indebtedness,Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(9) agreements entered into with respect to Liens securing
Indebtedness otherwise permitted to be incurred pursuant to the provisions
of the covenant described above under the caption "-- Certain
Covenants -- Liens" that limit the right of the CompanyAmkor or any of its Restricted
Subsidiaries to dispose of the assets subject to such Lien;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
31
(12) any Receivables Program; and
(13) any restriction imposed pursuant to contracts for the sale of
assets with respect to the transfer of the assets to be sold pursuant to
such contract.
Merger, Consolidation, or Sale of Assets
The CompanyMERGER, CONSOLIDATION OR SALE OF ASSETS
Amkor may not, directly or indirectly: (1)indirectly consolidate or merge with or into
another Person (whether or not the CompanyAmkor is the surviving corporation); or (2) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of its
properties or assets, in one or more related transactions, to another Person,
unless:
(1) either:either (a) the CompanyAmkor is the surviving corporation;corporation or (b) the Person
formed by or surviving any such consolidation or merger (if other than
the
Company)Amkor) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Company)Amkor) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of the CompanyAmkor under the Senior Notes, the Senior Notes Indenture and the
Registration Rights Agreement applicable to the Senior
Notes pursuant to agreements reasonably
satisfactory to the Senior Notes Trustee;
(3) immediately after such transaction no Default or Event of Default
exists;
(4) except in the case of the amalgamation, consolidation or merger of
the
CompanyAmkor (a) with or into a Wholly Owned Restricted Subsidiary or (b) with or
into any Person solely for the purpose of effecting a change in the state
of incorporation of the Company, the CompanyAmkor, Amkor or the Person formed by or surviving any
such consolidation or merger (if other than the Company)Amkor) will, on the date of
such transaction after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Interest Expense
Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock;"Stock"; and
(5) the CompanyAmkor shall have delivered to the Senior Notes Trustee an Officer's Certificate
stating that such consolidation, merger, sale, assignment, transfer,
conveyance or other disposition complies with the Senior Notes
Indenture.
In addition, the CompanyAmkor may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation or Sale of
Assets" 36
42
covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets by the CompanyAmkor to any of its Wholly Owned Restricted
Subsidiaries.
Transactions with Affiliates
The CompanyTRANSACTIONS WITH AFFILIATES
Amkor will not, and will not permit any of its Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction (when viewed together with related
Affiliate Transactions, if any) is on terms that are no less favorable to
the CompanyAmkor or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the CompanyAmkor or such Restricted Subsidiary
with an unrelated Person; and
(2) the CompanyAmkor delivers to the Senior Notes Trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$10.0$10 million, a resolution of the Board of Directors set forth in an
Officers'Officer's Certificate certifying that such Affiliate Transaction
complies with this covenant and that
32
such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors (of which there must be
at least one); and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$25.0$25 million, an opinion as to the fairness to the Holdersholders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing;
provided that (i) the CompanyAmkor and its Restricted Subsidiaries may enter into Affiliate
Transactions pursuant to the Supply Agreement, the Foundry Agreement, the Asset
Purchase Agreement, the Transition Services Agreement and the Intellectual
Property Rights Licensing Agreement, and may amend, modify and supplement such
agreements from time to time, so long as the CompanyAmkor shall have determined that any
such amendment, modification or supplement will not have a material adverse
economic effect on the CompanyAmkor and its Subsidiaries, taken as a whole, and (ii) the CompanyAmkor
and its Restricted Subsidiaries may only enter into transactions pursuant to the
Supply Agreement, the Foundry Agreement, the Asset Purchase Agreement, the
Transition Services Agreement and the Intellectual Property Rights Licensing
Agreement, and amend, modify and supplement such agreements from time to time,
in circumstances in which clause (i) is not applicable, if a majority of the
disinterested members of the Board of Directors (of which there must be at least
one) shall have approved such transaction, amendment, modification or
supplement; provided, further, that in the case of both clauses (i) and (ii),
the CompanyAmkor shall deliver to the Senior Notes Trustee within 30 days of such transaction,
amendment, modification or supplement an Officer's Certificate (A) describing
the transaction, amendment, modification or supplement approved, (B) in the case
of transactions, amendments, modifications and supplements to which clause (i)
is applicable, setting forth the determination of the CompanyAmkor required pursuant to
clause (i), and (C) in the case of transactions, amendments, modifications and
supplements to which clause (ii) is applicable, attaching a resolution of the
Board of Directors certifying that such Affiliate Transaction complies with this
covenant.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraphs:
(1) any employment agreement or arrangement entered into by the CompanyAmkor or
any of its Restricted Subsidiaries or any employee benefit plan available
to employees of the CompanyAmkor and its Subsidiaries
37
43 generally, in each case in the
ordinary course of business and consistent with the past practice of the CompanyAmkor
or such Restricted Subsidiary;
(2) Affiliate Transactions between or among the CompanyAmkor and/or its
Restricted Subsidiaries;
(3) payment of reasonable directorsdirectors' fees to Persons who are not
otherwise Affiliates of the CompanyAmkor and indemnity provided on behalf of officers,
directors and employees of the CompanyAmkor or any of its Restricted Subsidiaries as
determined in good faith by the Board of Directors of the Company;Amkor;
(4) Any Affiliate Transactions pursuant to which the CompanyAmkor makes
short-term advances or otherwise makes short-term loans to ASI, which
advances or loans are to be repaid by ASI (i) within three months from the
date of such advance or loan and (ii) by offsets by the CompanyAmkor of amounts
payable by the
CompanyAmkor to ASI pursuant to the Supply Agreements,Agreement, if a majority of
the disinterested members of the Board of Directors (of which there must be
at least one) shall have approved such transaction, amendment, modification
or supplement; provided that the total amount of such advances and loans
outstanding at any one time shall not exceed $50.0$50 million; and
(5) Any Restricted Payments that are permitted by the provisions of the Senior
Notes Indentureas described above
under the caption "-- Certain Covenants -- Restricted Payments."
For purposes of this "Transactions withWith Affiliates" covenant, any
transaction or series of related Affiliate Transactions between the CompanyAmkor or any
Restricted Subsidiary and an Affiliate that is approved by a majority of the
disinterested members of the Board of Directors (of which there must be at least
one to utilize this method of approval) and evidenced by a boardBoard resolution or
for which a fairness opinion has been issued shall be deemed to be on terms that
are no less favorable to the CompanyAmkor or the relevant Restricted Subsidiary than those
33
that would have been obtained in a comparable transaction by the CompanyAmkor or such
Restricted Subsidiary with an unrelated Person and thus shall be permitted under
this "Transactions withWith Affiliates" covenant.
Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries acquires, creates or
capitalizes a Domestic Subsidiary after the date of the Indenture that is a
Significant Subsidiary, then that newly acquired, created or capitalized
Subsidiary must become a Guarantor and execute a supplemental indenture
satisfactory to the Senior Notes Trustee and deliver an Opinion of Counsel to
the Senior Notes Trustee within 10 Business Days of the date on which it was
acquired or created.
Sale and Leaseback Transactions
The CompanySALE AND LEASEBACK TRANSACTIONS
Amkor will not, and will not permit any of its Subsidiaries to, enter into
any sale and leaseback transaction; provided that the CompanyAmkor or any Restricted
Subsidiary may enter into a sale and leaseback transaction if:
(1) the CompanyAmkor or such Restricted Subsidiary, as applicable, could have
incurred Indebtedness in an amount equal to the Attributable Debt relating
to such sale and leaseback transaction (if the lease is in the nature of an
operating lease, otherwise the amount of Indebtedness) under the
Consolidated Interest Expense Coverage Ratio test in the first paragraph of
the covenant described above under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock;"Stock";
and
(2) the transfer of assets in that sale and leaseback transaction is
permitted by, and the CompanyAmkor applies the proceeds of such transaction in
compliance with, the covenant described above under the caption "--
Repurchase at the Option of Holders -- Offer to Repurchase by Application
of Excess Proceeds of Asset Sales."
38
44
The foregoing restriction shall not apply to any sale and leaseback
transaction if (i) the transaction is solely between the CompanyAmkor and any Restricted
Subsidiary or between Restricted Subsidiaries or (ii) the sale and leaseback
transaction is consummated within 180 days after the purchase of the assets
subject to such transaction.
No Amendment to Subordination ProvisionsNO AMENDMENT TO SUBORDINATION PROVISIONS
Without the consent of the Holdersholders of at least a majority in aggregate
principal amount of the Senior Notes then outstanding, the CompanyAmkor will not amend, modify or
alter the Senior Subordinated Notes Indentureindenture governing the 10.50% senior subordinated notes due 2009 in
any way to:
(1) increase the rate of or change the time for payment of interest on
any Senior Subordinated Notes;10.50% senior subordinated notes due 2009;
(2) increase the principal of, advance the final maturity date of or
shorten the Weighted Average Life to Maturity of any Senior Subordinated Notes;10.50% senior
subordinated notes due 2009;
(3) alter the redemption provisions or the price or terms at which
the CompanyAmkor is required to offer to purchase any Senior Subordinated Notes;10.50% senior subordinated notes
due 2009; or
(4) amend the subordinated provisions of Article 10 contained in the
indenture governing the 10.50% senior subordinated notes due 2009.
SUBSIDIARY GUARANTEES
If Amkor or any of its Restricted Subsidiaries acquires, creates or
capitalizes a Domestic Subsidiary after the date of the Senior Subordinated Notes
Indenture (which relatethat is a
Significant Subsidiary, then that newly acquired, created or capitalized
Subsidiary must become a Guarantor and execute a supplemental indenture
satisfactory to subordination).
Designationthe Trustee and deliver an opinion of Restricted and Unrestricted Subsidiariescounsel to the Trustee
within 10 business days of the date on which it was acquired or created.
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by the CompanyAmkor and its Restricted Subsidiaries in the
Subsidiary so designated will be deemed to be an Investment made as of the time
of such designation and will reduce the amount available for Restricted Payments
under the first paragraph of the covenant described above under the caption "-- Certain
34
Covenants -- Restricted Payments" or Permitted Investments, as applicable. All
such outstanding Investments will be valued at their fair market value at the
time of such designation. That designation will only be permitted if such
Restricted Payment would be permitted at that time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The
Board of Directors may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if the redesignation would not cause a Default.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned Restricted
Subsidiaries
The CompanyLIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY OWNED
RESTRICTED SUBSIDIARIES
Amkor will not, and will not permit any of its Wholly Owned Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary of the CompanyAmkor to any
Person (other than the CompanyAmkor or a Wholly Owned Restricted Subsidiary of the
Company)Amkor),
unless:
(1) such transfer, conveyance, sale, lease or other disposition is of
all the Equity Interests in such Wholly Owned Restricted Subsidiary or
immediately following such transfer, conveyance, sale, lease or other
disposition, the Wholly Owned Restricted Subsidiary is a Restricted
Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease
or other disposition are applied in accordance with the covenant described
above under the caption "-- Repurchase at the Option of Holders -- Offer to
Repurchase by Application of Excess Proceeds of Asset Sales."
In addition, the CompanyAmkor will not permit any Wholly Owned Restricted Subsidiary
of the CompanyAmkor to issue any of its Equity Interests (other than, if necessary, shares
of its Capital Stock constituting directors' qualifying shares) to any Person
other than to the CompanyAmkor or a Wholly Owned Restricted Subsidiary of the CompanyAmkor unless
immediately following such issuance the Wholly Owned Restricted Subsidiary is a
Restricted Subsidiary.
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45
DESCRIPTION OF THE SENIOR SUBORDINATED NOTES
RANKING
The Senior Subordinated Notes:
N are general obligations of the Company;
N are subordinated in right of payment to all existing and future Senior Debt of
the Company, including the Senior Notes;
N are effectively subordinated in right of payment to all existing and future
liabilities of our Subsidiaries, including trade payables; and
N are senior in right of payment to any subordinated Indebtedness of the
Company, including the Convertible Notes and are "Designated Senior Debt" for
purposes of the indenture governing the Convertible Notes.
Assuming we had completed the offering of the Notes and applied the net
proceeds as intended, as of September 30, 1999, the Company would have had total
Senior Debt of approximately $438.5 million. In addition, our Subsidiaries would
have had total liabilities of approximately $242.1 million. As indicated above
and as discussed in detail below under the subheading "Subordination," payments
on the Senior Subordinated Notes will be subordinated to the payment of Senior
Debt, including the Senior Notes. The Senior Subordinated Notes Indenture will
permit us to incur additional Senior Debt.
We conduct a large portion of our operations through our Subsidiaries.
Accordingly, our ability to meet our cash obligations is dependent upon the
ability of our Subsidiaries to make cash distributions to us. Dividends from our
Subsidiaries are expected to be a large source of funds for payment of interest
on the Senior Subordinated Notes. The claims of creditors (including trade
creditors) of any Subsidiary will generally have priority as to the assets of
such Subsidiary over the claims of the holders of the Senior Subordinated Notes.
In the event of a liquidation of any of our Subsidiaries, our right to receive
the assets of any such Subsidiary (and the resulting right of the Holders of the
Senior Subordinated Notes to participate in the distribution of the proceeds of
those assets) will effectively be subordinated by operation of law to the claims
of creditors (including trade creditors) of such Subsidiary and holders of such
Subsidiary's preferred stock and any Guarantees by such Subsidiary of
Indebtedness of the Company. If the Company were a creditor of such Subsidiary
or a holder of its preferred stock, we would be entitled to participate in the
distribution of the proceeds of such Subsidiary's assets. Our claims would,
however, remain subordinate to any Indebtedness or preferred stock of such
Subsidiary which is senior in right of payment to the Indebtedness or preferred
stock held by us. In the event of the liquidation, bankruptcy, reorganization,
insolvency, receivership or similar proceeding or any assignment for the benefit
of our creditors or a marshaling of our assets or liabilities, Holders of the
Senior Subordinated Notes may receive ratably less than other such creditors or
interest holders.
As of the date of this prospectus, all of our subsidiaries are "Restricted
Subsidiaries." However, under the circumstances described below under the
subheading "Certain Covenants -- Designation of Restricted and Unrestricted
Subsidiaries," we will be permitted to designate certain of our subsidiaries as
"Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants in the Senior Subordinated Notes Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Senior Subordinated Notes Indenture is limited in aggregate principal
amount to $300.0 million, of which $200.0 million was issued in the offering on
May 13, 1999, and will mature on May 1, 2009. The Senior Subordinated Notes
Indenture provides for the issuance of up to an additional $100.0 million
aggregate principal amount of additional notes having identical terms and
conditions as the Senior Subordinated Notes offered hereby (the "Additional
Senior Subordinated Notes"), subject to the limitations set forth under
"-- Certain
40
46
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock." Any
Additional Senior Subordinated Notes will be part of the same issue of Senior
Subordinated Notes issued on May 13, 1999 and will vote on all matters with the
Senior Subordinated Notes issued on May 13, 1999. For purposes of this
"Description of Notes," references to the Senior Subordinated Notes do not
include Additional Senior Subordinated Notes.
Interest on the Senior Subordinated Notes will accrue at the rate of 10 1/2%
per annum and will be payable semi-annually in arrears on May 1 and November 1,
commencing on November 1, 1999. The Company will make each interest payment to
the Holders of record of the Senior Subordinated Notes on the immediately
preceding April 15 and October 15.
Interest on the Senior Subordinated Notes will accrue from the date of
original issuance or, if interest has already been paid, from the date it was
most recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The interest rate on the Senior Subordinated Notes would have been subject
to increase if the Company did not file the registration statement of which this
prospectus forms a part relating to the Exchange Offer on a timely basis, if the
registration statement was not declared effective on a timely basis or if
certain other conditions are not satisfied, all as further described under the
caption "Provisions Common to Both Senior Notes and Senior Subordinated
Notes -- Registration Rights; Liquidated Damages." All references to interest on
the Senior Subordinated Notes include any such Liquidated Damages that may be
payable. The Company issued the old Senior Subordinated Notes in denominations
of $1,000 and integral multiples of $1,000 and will issue the new Senior
Subordinated Notes also in denominations of $1,000 and integral multiples of
$1,000.
SUBORDINATION
The payment of principal, premium and interest, if any, on the Senior
Subordinated Notes and all other payments in respect of the Senior Subordinated
Notes, whether in connection with a Change of Control, an Asset Sale, defeasance
or otherwise, will be subordinated to the prior payment in full in cash of all
Senior Debt of the Company, including the Senior Notes.
The holders of Senior Debt, including the Senior Notes, will be entitled to
receive payment in full in cash of all Obligations due in respect of Senior Debt
(including interest, expense reimbursements and indemnities after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt, whether or not such claims are allowed, allowable or enforceable in
such proceeding and even if disallowed therein) before the Holders of the Senior
Subordinated Notes will be entitled to receive any payment with respect to the
Senior Subordinated Notes (except that Holders of Senior Subordinated Notes may
receive and retain Permitted Junior Securities and payments made from the trust
described under "Provisions Common to Both Senior Notes and Senior Subordinated
Notes -- Legal Defeasance and Covenant Defeasance"), in the event of any
distribution to creditors of the Company:
(1) in a liquidation or dissolution of the Company;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshalling of the Company's assets and liabilities.
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47
The Company also may not make any payment in respect of the Senior
Subordinated Notes (except in Permitted Junior Securities or from the trust
described under "Provisions Common to Both Senior Notes and Senior Subordinated
Notes -- Legal Defeasance and Covenant Defeasance") if:
(1) a payment default on Senior Debt, including the Senior Notes, occurs and is
continuing; or
(2) any other default occurs and is continuing on Designated Senior Debt that
permits holders of the Designated Senior Debt to accelerate its maturity and
the Trustee receives a notice of such default (a "Payment Blockage Notice")
from the holders of any Designated Senior Debt or their agent or
representative.
Payments on the Senior Subordinated Notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such default is
cured or waived; and
(2) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which
the applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until 360 days
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice.
No nonpayment default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the Senior Subordinated Notes Trustee shall
be, or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than 180 days.
If the Senior Subordinated Notes Trustee or any Holder of the Senior
Subordinated Notes receives a payment in respect of the Senior Subordinated
Notes (except in Permitted Junior Securities or from the trust described under
"Provisions Common to Both Senior Notes and Senior Subordinated Notes -- Legal
Defeasance and Covenant Defeasance") when:
(1) the payment is prohibited by these subordination provisions; and
(2) the Senior Subordinated Notes Trustee or the Holder has actual knowledge
that the payment is prohibited;
the Senior Subordinated Notes Trustee or the Holder, as the case may be, shall
hold the payment in trust for the benefit of the holders of Senior Debt,
including the Senior Notes. Upon the proper written request of the holders of
Senior Debt, including the Senior Notes, the Senior Subordinated Notes Trustee
or the Holder, as the case may be, shall deliver the amounts in trust to the
holders of Senior Debt or their proper representative.
The Company must promptly notify holders of Senior Debt, including the
Senior Notes, if payment of the Senior Subordinated Notes is accelerated because
of an Event of Default.
As a result of the subordination provisions described above, in the event of
a bankruptcy, liquidation or reorganization of the Company, Holders of the
Senior Subordinated Notes may recover less ratably than creditors of the Company
who are holders of Senior Debt, including the Senior Notes. See "Risk Factors --
Subordination of the New Senior Subordinated Notes."
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48
OPTIONAL REDEMPTION
During the first 36 months after the Issue Date, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Senior
Subordinated Notes originally issued under the Senior Subordinated Notes
Indenture at a redemption price of 110.50% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; provided that
(1) at least $130.0 million in aggregate principal amount of Senior Subordinated
Notes remains outstanding immediately after the occurrence of such
redemption (excluding Senior Subordinated Notes held by the Company and its
Subsidiaries); and
(2) the redemption must occur within 45 days of the date of the closing of such
Equity Offering.
Except pursuant to the preceding paragraph, the Senior Subordinated Notes
will not be redeemable at the Company's option prior to May 1, 2004.
On or after May 1, 2004, the Company may redeem all or a part of the Senior
Subordinated Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on May 1 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2004.................................................. 105.250%
2005.................................................. 103.500%
2006.................................................. 101.750%
2007 and thereafter................................... 100.000%
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
If a Change of Control occurs, each Holder of Senior Subordinated Notes will
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder's Senior Subordinated
Notes pursuant to the Change of Control Offer. In the Change of Control Offer,
the Company will offer a Change of Control Payment in cash equal to 101% of the
aggregate principal amount of Senior Subordinated Notes repurchased plus accrued
and unpaid interest thereon, if any, to the date of purchase. Within 30 days
following any Change of Control, the Company will mail a notice to each Holder
of Senior Subordinated Notes describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Senior Subordinated
Notes on the date specified in such notice (the "Change of Control Payment
Date"), pursuant to the procedures required by the Senior Subordinated Notes
Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Senior Subordinated Notes as
a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Senior Subordinated Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Senior Subordinated Notes or portions thereof so
tendered; and
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(3) deliver or cause to be delivered to the Senior Subordinated Notes Trustee
the Senior Subordinated Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Subordinated
Notes or portions thereof being purchased by the Company.
The Paying Agent will promptly mail to each Holder of Senior Subordinated
Notes so tendered the Change of Control Payment for such Senior Subordinated
Notes, and the Senior Subordinated Notes Trustee will promptly authenticate and
mail (or cause to be transferred by book entry) to each Holder a new Senior
Subordinated Note equal in principal amount to any unpurchased portion of the
Senior Subordinated Notes surrendered, if any; provided that each such new
Senior Subordinated Note will be in a principal amount of $1,000 or an integral
multiple thereof.
Prior to repurchasing the Senior Subordinated Notes following a Change of
Control, but in any event within 90 days following a Change of Control, the
Company will either repay all outstanding Senior Debt, including the Senior
Notes, or obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt, including the Senior Notes Indenture, to permit the
repurchase of Senior Subordinated Notes required by this covenant. The Company
will publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
The provisions described above that require the Company to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether or not any other provisions of the Senior Subordinated Notes Indenture
are applicable. Except as described above with respect to a Change of Control,
the Senior Subordinated Notes Indenture does not contain provisions that permit
the Holders of the Senior Subordinated Notes to require that the Company
repurchase or redeem the Senior Subordinated Notes in the event of a takeover,
recapitalization or similar transaction.
The Senior Subordinated Notes Indenture will prohibit the Company from
purchasing any Senior Subordinated Notes. Any future credit agreements or other
agreements relating to Senior Debt to which the Company becomes a party may
contain similar restrictions and may provide that certain change of control
events with respect to the Company constitute a default under or require
repayment of those facilities. In the event a Change of Control occurs at a time
when the Company is prohibited from purchasing Senior Subordinated Notes, the
Company could seek the consent of its senior lenders to the purchase of Senior
Subordinated Notes or could attempt to refinance the borrowings that contain
such prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company will remain prohibited from purchasing Senior
Subordinated Notes. In such case, the Company's failure to purchase tendered
Senior Subordinated Notes would constitute an Event of Default under the Senior
Subordinated Notes Indenture which would, in turn, constitute a default under
such Senior Debt. In such circumstances, the subordination provisions in the
Senior Subordinated Notes Indenture would likely restrict payments to the
Holders of Senior Subordinated Notes.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Senior Subordinated Notes Indenture applicable to a Change of Control
Offer made by the Company and purchases all Senior Subordinated Notes validly
tendered and not withdrawn under such Change of Control Offer.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a limited body of case law interpreting the phrase "substantially all,"
there is no precise established definition of the phrase under applicable law.
Accordingly, the ability of a Holder of Senior Subordinated Notes to require the
Company to repurchase such Senior Subordinated Notes as a result of a sale,
lease, transfer, conveyance or other disposition of less than all of the assets
of the Company and its Subsidiaries taken as a whole to another Person or group
may be uncertain.
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Asset Sales
The Company will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or otherwise
disposed of;
(2) such fair market value is determined by the Company's Board of Directors;
and
(3) at least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash or other Qualified Proceeds.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds at its option:
(1) to repay Senior Debt, and if such Senior Debt is revolving debt, to effect a
corresponding commitment reduction thereunder;
(2) to acquire all or substantially all of the assets of, or a majority of the
Voting Stock of, another Permitted Business;
(3) to make a capital expenditure; or
(4) to acquire any other long-term assets that are used or useful in a Permitted
Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Senior Subordinated Notes
Indenture.
Any Net Proceeds from any Asset Sale that are not applied or invested as
provided in the preceding paragraph within 365 days of such Asset Sale will
constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company will make an Asset Sale Offer to all Holders of
Senior Subordinated Notes and all holders of other Indebtedness that is pari
passu with the Senior Subordinated Notes containing provisions similar to those
set forth in the Senior Subordinated Notes Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets to purchase the maximum
principal amount of Senior Subordinated Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of principal amount plus accrued
and unpaid interest, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Senior Subordinated Notes Indenture. If the aggregate
principal amount of Senior Subordinated Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Senior Subordinated Notes Trustee shall select the Senior
Subordinated Notes and such other pari passu Indebtedness to be purchased on a
pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
Selection and Notice
If less than all of the Senior Subordinated Notes are to be redeemed at any
time, the Senior Subordinated Notes Trustee will select Senior Subordinated
Notes for redemption as follows:
(1) if the Senior Subordinated Notes are listed, in compliance with the
requirements of the principal national securities exchange on which the
Senior Subordinated Notes are listed; or
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(2) if the Senior Subordinated Notes are not so listed, on a pro rata basis, by
lot or by such method as the Senior Subordinated Notes Trustee shall deem
fair and appropriate.
No Senior Subordinated Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Senior
Subordinated Notes to be redeemed at its registered address. Notices of
redemption may not be conditional.
If any Senior Subordinated Note is to be redeemed in part only, the notice
of redemption that relates to that Senior Subordinated Note shall state the
portion of the principal amount thereof to be redeemed. A new Senior
Subordinated Note in principal amount equal to the unredeemed portion of the
original Senior Subordinated Note will be issued in the name of the Holder
thereof upon cancellation of the original Senior Subordinated Note. Senior
Subordinated Notes called for redemption become due on the date fixed for
redemption. On and after the redemption date, interest ceases to accrue on
Senior Subordinated Notes or portions of them called for redemption.
CERTAIN COVENANTS
Restricted Payments
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on
account of the Company's or any of its Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the Company's or any
of its Restricted Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity Interests (other
than Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving
the Company) any Equity Interests of the Company or any direct or indirect
parent of the Company or any Restricted Subsidiary of the Company (other
than any such Equity Interests owned by the Company or any Restricted
Subsidiary of the Company);
(3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated
to the Senior Subordinated Notes, except a payment of interest or principal
at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to as
"Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Interest Expense Coverage Ratio test set forth in the first paragraph of the
covenant described below under the caption "-- Incurrence of Indebtedness
and Issuance of Preferred Stock"; and
(3) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of the Senior Subordinated Notes Indenture
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(excluding Restricted Payments permitted by clauses (2), (3), (4), (7) and
(9) of the next succeeding paragraph), is less than the sum, without
duplication, of
(a) 50% of the Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after the date of the Senior Subordinated Notes Indenture to
the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company since
the date of the Senior Subordinated Notes Indenture as a contribution to
its common equity capital or from the issue or sale of Equity Interests
of the Company (other than Disqualified Stock) (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after the
date of the Senior Subordinated Notes Indenture is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (i) the cash
return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (ii) the initial amount of such
Restricted Investment, plus
(d) the amount by which (i) Indebtedness (other than Disqualified Stock) of
the Company or any Restricted Subsidiary issued after the Issue Date is
reduced on the Company's consolidated balance sheet (if prepared in
accordance with GAAP as of the date of determination) and (ii)
Disqualified Stock of the Company issued after the Issue Date (held by
any Person other than any Restricted Subsidiary) is reduced (measured
with reference to its redemption or repurchase price), in each case, as
a result of the conversion or exchange of any such Indebtedness or
Disqualified Stock into Equity Interests (other than Disqualified Stock)
of the Company, less, in each case, any cash distributed by the Company
upon such conversion or exchange, plus
(e) to the extent that any Investment in any Unrestricted Subsidiary that
was made after the date of the Senior Subordinated Notes Indenture is
sold for cash or otherwise liquidated, repaid for cash or such
Unrestricted Subsidiary is converted into a Restricted Subsidiary, the
lesser of (i) an amount equal to the sum of (A) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances or other transfers of assets, in each
case to the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, and (B) the fair market value of the net assets of an
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary, and (ii) the remaining amount of the
Investment in such Unrestricted Subsidiary which has not been repaid or
converted into cash or assets.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of declaration
thereof, if at the date of declaration no Default has occurred and is
continuing or would be caused thereby and such payment would have complied
with the provisions of the Senior Subordinated Notes Indenture;
(2) the making of any payment on or with respect to, or in connection with, the
redemption, repurchase, retirement, defeasance or other acquisition of, any
Indebtedness of the Company or any Restricted Subsidiary that is
subordinated to the Senior Subordinated Notes or of any Equity Interests of
the Company or any Restricted Subsidiary in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests (other than Disqualified
Stock) of the Company or any subordinated Indebtedness of the Company;
provided that the amount of any such net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (3)(b) of the preceding
paragraph;
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(3) the making of any payment on or with respect to, or in connection with, the
defeasance, redemption, repurchase or other acquisition of Indebtedness of
the Company or any Restricted Subsidiary that is subordinated to the Senior
Notes with the net cash proceeds from the incurrence of Permitted
Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the Company to
the holders of its common Capital Stock on a pro rata basis;
(5) so long as no Default has occurred and is continuing or would be caused
thereby, the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company held by any employee of the Company or any Restricted
Subsidiary pursuant to any employee equity subscription agreement, stock
ownership plan or stock option agreement in effect from time to time;
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $2.0 million in any
twelve-month period and $10.0 million in the aggregate;
(6) the making of any payment on or with respect to, or repurchase, redemption,
defeasance or other acquisition or retirement for value of the Convertible
Notes in connection with (i) so long as no Event of Default has occurred
and is continuing or would be caused thereby, an optional redemption of the
Convertible Notes on or after May 3, 2001 pursuant to the terms thereof, or
(ii) the honoring by the Company of any conversion request by a holder of
the Convertible Notes (including the payment by the Company of any cash in
lieu of fractional shares) in accordance with their terms;
(7) that portion of Investments the payment for which consists exclusively of
Equity Interests (other than Disqualified Stock) of the Company;
(8) so long as no Default has occurred and is continuing or would be caused
thereby, other Restricted Payments in an aggregate amount not to exceed
$25.0 million;
(9) the repurchase of Equity Interests of the Company that may be deemed to
occur upon the exercise of stock options if such Equity Interests represent
a portion of the exercise price thereof; and
(10) any payments to one or more shareholders of the Company in connection with
settling shareholder obligations for income taxes in respect of tax periods
ending prior to the conversion of the Company from "S" corporation status
to "C" corporation status.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant with a fair market value in excess of $1.0 million but less than $5.0
million shall be evidenced by an Officer's Certificate which shall be delivered
to the Senior Subordinated Notes Trustee. The fair market value of any assets or
securities that are required to be valued by this covenant with a fair market
value in excess of $5.0 million shall be determined by the Board of Directors
whose resolution with respect thereto shall be delivered to the Senior
Subordinated Notes Trustee.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company and any Restricted Subsidiary that is a Guarantor may
incur Indebtedness (including Acquired Debt), and the Company may issue
Disqualified Stock,
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and any Restricted Subsidiary that is a Guarantor may issue preferred stock, if
the Consolidated Interest Expense Coverage Ratio for the Company's most recently
ended four full fiscal quarters (the "Reference Period") for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.5 to 1, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock or preferred stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any Restricted Subsidiary of any
Permitted Bank Debt; provided that the aggregate principal amount of all
Permitted Bank Debt at any one time outstanding shall not exceed $100.0
million plus 85% of the consolidated accounts receivable of the Company
plus 50% of the consolidated inventory of the Company;
(2) the incurrence by the Company and its Subsidiaries of Existing
Indebtedness;
(3) the incurrence by the Company and any Guarantor of Indebtedness represented
by the Senior Notes, the Senior Subordinated Notes and any Subsidiary
Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of (a)
Indebtedness incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property, plant or
equipment used in the business of the Company or such Restricted Subsidiary
and (b) Capital Lease Obligations, in an aggregate amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed 10% of the Company's Consolidated Net Assets;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace, Indebtedness (other than
intercompany Indebtedness) that was permitted by the Indenture to be
incurred under the first paragraph of this covenant or clauses (2), (3),
(5), (13) or (14) of this paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness and
such Indebtedness is in favor of a Restricted Subsidiary other than a
Wholly Owned Restricted Subsidiary, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all Obligations
with respect to the Senior Subordinated Notes and all Senior Debt, in
the case of the Company, or the Senior Subordinated Subsidiary Guarantee
and all Senior Debt of such Guarantor, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results
in any such Indebtedness being held by a Person other than the Company
or a Wholly Owned Restricted Subsidiary thereof and (ii) any sale or
other transfer of any such Indebtedness to a Person that is not either
the Company or a Wholly Owned Restricted Subsidiary thereof; shall be
deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate, commodity or currency risk in the ordinary course of
business for bona fide hedging purposes; provided that the notional
principal amount of any such
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Hedging Obligation with respect to interest rates does not exceed the
amount of Indebtedness or other liability to which such Hedging Obligation
relates;
(8) the Guarantee by the Company or any of the Guarantors of Indebtedness of
the Company or a Restricted Subsidiary of the Company that was permitted to
be incurred by another provision of this covenant;
(9) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse
Debt; provided, however, that if any such Indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed
to constitute an incurrence of Indebtedness by a Restricted Subsidiary of
the Company that was not permitted by this clause (9);
(10) the incurrence of Indebtedness solely in respect of performance, surety and
similar bonds or completion or performance Guarantees, to the extent that
such incurrence does not result in the incurrence of any obligation for the
payment of borrowed money to others;
(11) the incurrence of Indebtedness arising from the agreements of the Company
or a Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business, assets or a
Subsidiary; provided, however, that:
(a) such Indebtedness is not reflected as a liability on the balance sheet
of the Company or any Restricted Subsidiary of the Company; and
(b) the maximum assumable liability in respect of all such Indebtedness
shall at no time exceed value of such giving effect to any Company and
its Restricted the gross proceeds, non-cash proceeds subsequent changes
Subsidiaries in including non-cash being measured at in value), actually
connection with proceeds (the fair the time received by the such
disposition;
(12) the accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock; provided, in each such case, that the amount thereof is
included in Consolidated Interest Expense of the Company as accrued;
(13) the incurrence of Indebtedness by Foreign Subsidiaries in an amount not to
exceed 10% of the Total Tangible Assets of the Foreign Subsidiaries, taken
as a whole; and
(14) the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (14), not to exceed $25.0
million.
Indebtedness or preferred stock of any Person which is outstanding at the
time such Person becomes a Restricted Subsidiary of the Company (including upon
designation of any Subsidiary or other Person as a Restricted Subsidiary) or is
merged with or into or consolidated with the Company or a Restricted Subsidiary
of the Company shall be deemed to have been incurred at the time such Person
becomes such a Restricted Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Restricted Subsidiary of the Company, as
applicable.
For purposes of determining compliance with this "Incurrence of Indebtedness
and Issuance of Preferred Stock" covenant, in the event that an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (14) above, or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company will be permitted
to classify or reclassify such item of Indebtedness (or any part thereof) in any
manner that complies with this covenant.
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For purposes of determining any particular amount of Indebtedness under this
covenant, Guarantees, Liens or obligations in support of letters of credit
supporting Indebtedness shall not be included to the extent such letters of
credit are included in the amount of such Indebtedness.
Any increase in the amount of any Indebtedness solely by reason of currency
fluctuations shall not be considered an incurrence of Indebtedness for purposes
of this covenant.
No Senior Subordinated Debt
The Company will not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt of the Company and senior in any respect in right of
payment to the Senior Subordinated Notes. No Guarantor will incur, create,
issue, assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to any Senior Debt of such Guarantor
and senior in any respect in right of payment to such Guarantor's Senior
Subordinated Subsidiary Guarantee. The foregoing limitation shall not apply to
distinctions between items of Senior Debt that exist by reason of any Liens,
Guarantees, maturity of payments or structural seniority.
Liens
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind securing Indebtedness on any asset now owned or hereafter acquired,
except Permitted Liens and Liens securing Senior Debt that was permitted to be
incurred under the terms of the Senior Subordinated Notes Indenture, unless
(1) in the case of Liens securing Indebtedness that is expressly subordinate or
junior in right of payment to the Senior Subordinated Notes, the Senior
Subordinated Notes are secured by a Lien on such assets that is senior in
priority to such Liens; and
(2) in all other cases, the Senior Subordinated Notes are equally and ratably
secured with the obligations so secured,
in each case, for as long as such Indebtedness will be so secured.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Company will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to the
Company or any of the Company's Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to the Company or any of the Company's Restricted
Subsidiaries;
(2) make loans or advances to the Company or any of the Company's Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of the
Company's Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the Senior Subordinated
Notes Indenture and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, with
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respect to such dividend and other payment restrictions than those
contained in such Existing Indebtedness, as in effect on the date of the
Indenture;
(2) the Senior Subordinated Notes Indenture and the Senior Subordinated Notes
and the Senior Notes Indenture and the Senior Notes;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Senior
Subordinated Notes Indenture to be incurred;
(5) customary non-assignment provisions in leases, licenses or other contracts
entered into in the ordinary course of business and consistent with past
practices;
(6) purchase money obligations or Capital Lease Obligations for property
acquired in the ordinary course of business that impose restrictions on the
property so acquired of the nature described in clause (3) of the preceding
paragraph;
(7) any agreement for the sale or other disposition of a Restricted Subsidiary
that restricts dividends, distributions, loans, advances or transfers by
such Restricted Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced;
(9) agreements entered into with respect to Liens securing Indebtedness
otherwise permitted to be incurred pursuant to the provisions of the
covenant described above under the caption "-- Liens" that limit the right
of the Company or any of its Restricted Subsidiaries to dispose of the
assets subject to such Lien;
(10) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements entered
into in the ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;
(12) any Receivables Program; and
(13) any restriction imposed pursuant to contracts for the sale of assets with
respect to the transfer of the assets to be sold pursuant to such contract.
Merger, Consolidation, or Sale of Assets
The Company may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of its properties or assets, in one or more related
transactions, to another Person, unless:
(1) either: (a) the Company is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer,
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58
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof
or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if other
than the Company) or the Person to which such sale, assignment, transfer,
conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Senior Subordinated Notes, the Senior
Subordinated Notes Indenture and the Registration Rights Agreement
applicable to the Senior Subordinated Notes pursuant to agreements
reasonably satisfactory to the Senior Subordinated Notes Trustee;
(3) immediately after such transaction no Default or Event of Default exists;
(4) except in the case of the amalgamation, consolidation or merger of the
Company (a) with or into a Wholly Owned Restricted Subsidiary, or (b) with
or into any Person solely for the purpose of effecting a change in the state
of incorporation of the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company) will,
on the date of such transaction after giving pro forma effect thereto and
any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Interest
Expense Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "-- Incurrence of Indebtedness and
Issuance of Preferred Stock;" and
(5) the Company shall have delivered to the Senior Subordinated Notes Trustee an
Officer's Certificate stating that such consolidation, merger, sale,
assignment, transfer, conveyance or other disposition complies with the
Senior Subordinated Notes Indenture.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation, or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance or
other disposition of assets by the Company to any of its Wholly Owned Restricted
Subsidiaries.
Transactions with Affiliates
The Company will not, and will not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any transaction, contract, agreement, understanding, loan,
advance or Guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction (when viewed together with related Affiliate
Transactions, if any) is on terms that are no less favorable to the Company
or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0
million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of
Directors (of which there must be at least one); and
(b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $25.0
million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing;
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59
provided that (i) the Company and its Restricted Subsidiaries may enter into
Affiliate Transactions pursuant to the Supply Agreement, the Foundry Agreement,
the Asset Purchase Agreement, the Transition Services Agreement and the
Intellectual Property Rights Licensing Agreement, and may amend, modify and
supplement such agreements from time to time, so long as the Company shall have
determined that any such amendment, modification or supplement will not have a
material adverse economic effect on the Company and its Subsidiaries, taken as a
whole, and (ii) the Company and its Restricted Subsidiaries may only enter into
transactions pursuant to the Supply Agreement, the Foundry Agreement, the Asset
Purchase Agreement, the Transition Services Agreement and the Intellectual
Property Rights Licensing Agreement, and amend, modify and supplement such
agreements from time to time, in circumstances in which clause (i) is not
applicable, if a majority of the disinterested members of the Board of Directors
(of which there must be at least one) shall have approved such transaction,
amendment, modification or supplement; provided, further, that in the case of
both clauses (i) and (ii), the Company shall deliver to the Senior Subordinated
Notes Trustee within 30 days of such transaction, amendment, modification or
supplement an Officer's Certificate (A) describing the transaction, amendment,
modification or supplement approved, (B) in the case of transactions,
amendments, modifications and supplements to which clause (i) is applicable,
setting forth the determination of the Company required pursuant to clause (i),
and (C) in the case of transactions, amendments, modifications and supplements
to which clause (ii) is applicable, attaching a resolution of the Board of
Directors certifying that such Affiliate Transaction complies with this
covenant.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraphs:
(1) any employment agreement or arrangement entered into by the Company or any
of its Restricted Subsidiaries or any employee benefit plan available to
employees of the Company and its Subsidiaries generally, in each case in the
ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary;
(2) Affiliate Transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) payment of reasonable directors fees to Persons who are not otherwise
Affiliates of the Company and indemnity provided on behalf of officers,
directors and employees of the Company or any of its Restricted Subsidiaries
as determined in good faith by the Board of Directors of the Company;
(4) Any Affiliate Transactions pursuant to which the Company makes short-term
advances or otherwise makes short-term loans to ASI, which advances or loans
are to be repaid by ASI (i) within three months from the date of such
advance or loan and (ii) by offsets by the Company of amounts payable by the
Company to ASI pursuant to the Supply Agreements, if a majority of the
disinterested members of the Board of Directors (of which there must be at
least one) shall have approved such transaction, amendment, modification or
supplement; provided that the total amount of such advances and loans
outstanding at any one time shall not exceed $50.0 million; and
(5) Any Restricted Payments that are permitted by the provisions of the Senior
Subordinated Notes Indenture described above under the caption
"-- Restricted Payments."
For purposes of this "Transactions with Affiliates" covenant, any
transaction or series of related Affiliate Transactions between the Company or
any Restricted Subsidiary and an Affiliate that is approved by a majority of the
disinterested members of the Board of Directors (of which there must be at least
one to utilize this method of approval) and evidenced by a board resolution or
for which a fairness opinion has been issued shall be deemed to be on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person and thus shall be
permitted under this "Transactions with Affiliates" covenant.
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60
Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries acquires, creates or
capitalizes a Domestic Subsidiary after the date of the Indenture that is a
Significant Subsidiary, then that newly acquired, created or capitalized
Subsidiary must become a Guarantor and execute a supplemental indenture
satisfactory to the Senior Subordinated Notes Trustee and deliver an Opinion of
Counsel to the Senior Subordinated Notes Trustee within 10 Business Days of the
date on which it was acquired or created. Each Senior Subordinated Subsidiary
Guarantee will be subordinated to the prior payment in full of all Senior Debt
of that Subsidiary Guarantor, and senior in right of payment to any future
subordinated Indebtedness of such Subsidiary Guarantor.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary so designated will be deemed to be an Investment made as of the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of the covenant described above under the
caption "-- Restricted Payments" or Permitted Investments, as applicable. All
such outstanding Investments will be valued at their fair market value at the
time of such designation. That designation will only be permitted if such
Restricted Payment would be permitted at that time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The
Board of Directors may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if the redesignation would not cause a Default.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned Restricted
Subsidiaries
The Company will not, and will not permit any of its Wholly Owned Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary of the Company to any
Person (other than the Company or a Wholly Owned Restricted Subsidiary of the
Company), unless:
(1) such transfer, conveyance, sale, lease or other disposition is of all the
Equity Interests in such Wholly Owned Restricted Subsidiary or immediately
following such transfer, conveyance, sale, lease or other disposition, the
Wholly Owned Restricted Subsidiary is a Restricted Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with the covenant described above
under the caption "Repurchase at the Option of Holders -- Asset Sales."
In addition, the Company will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company unless immediately following such issuance the Wholly
Owned Restricted Subsidiary is a Restricted Subsidiary.
PROVISIONS COMMON TO BOTH SENIOR NOTES AND SENIOR SUBORDINATED NOTES
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holderholder has given wire transfer instructions to the Company, the CompanyAmkor, Amkor will make
all principal, premium and interest payments on those Notes in accordance with
those instructions. All other payments on the Notes will be made at the office
or agency of the Paying Agent and Registrar within the City and State of New
York unless the CompanyAmkor elects to make interest payments by check mailed to the
Holdersholders at their addressaddresses set forth in the register of Holders.
55
61holders.
PAYING AGENT AND REGISTRAR FOR THE NOTES
The TrusteesTrustee will initially act as Paying Agent and Registrar. The CompanyAmkor may
change the Paying Agent or Registrar without prior notice to the Holdersholders of the
Notes, and the CompanyAmkor or any of its Subsidiaries may act as Paying Agent or
Registrar.
TRANSFER AND EXCHANGE
A Holderholder may transfer or exchange Notes in accordance with the Indentures.Indenture.
The Registrar and the Trustee may require a Holder,holder, among other things, to
furnish appropriate endorsements and transfer documents and the CompanyAmkor may require a
Holderholder to pay any taxes and fees required by law or permitted by the Indenture.
The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holderholder of a Note will be treated as theits owner of it for all
purposes.
PAYMENTS FOR CONSENT
The CompanyAmkor will not, and will not permit any of its Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of
any Holderholder of the Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of the Indenture or the Notes unless
such consideration is offered to be paid and is paid to all Holdersholders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
35
REPORTS
Whether or not required by the Commission,SEC, so long as any Notes are outstanding,
the CompanyAmkor shall file with the CommissionSEC (if permitted) all of the reports and other
information as it would be required to file with the CommissionSEC by Sections 13(a) and
15(d) under the Securities Exchange Act, of
1934, as amended, as if it were subject thereto. The CompanyAmkor shall supply
the TrusteesTrustee and each Holderholder of the Notes, or shall supply to the TrusteesTrustee for
forwarding to each Holderholder of the Notes, without cost to any such Holder,holder, copies
of such reports and other information (whether or not so filed).
EVENTS OF DEFAULT AND REMEDIES
With respect to each of the Senior Notes, and the Senior Subordinated Notes,
respectively, each of the following is an Event"Event of Default:Default":
(1) default for 30 days in the payment when due of interest on, the Notes, (withor
Liquidated Damages with respect to, the Senior Subordinated Notes, whether or not prohibited by the
subordination provisions of the Senior Subordinated Notes Indenture);Notes;
(2) default in payment when due of the principal of or premium, if
any, on the Notes, (with respect to the Senior Subordinated Notes, whether or not
prohibited by the subordination provisions of the Senior Subordinated Notes
Indenture);Notes;
(3) failure by the CompanyAmkor or any of its Subsidiaries to make any payment
required to be made under the provisions described above under the captions
"Repurchasecaption
"-- Repurchase at the Option of Holders -- Offer to Repurchase Upon Change
of Control" or "-- Repurchase at the Option of Holders -- Offer to
Repurchase by Application of Excess Proceeds of Asset Sales";Sales;"
(4) failure by the CompanyAmkor or any of its Restricted Subsidiaries for 60 days
after notice to comply with any of thecovenant, representations, warranty or
other agreements in the IndenturesIndenture is provided to the CompanyAmkor by the TrusteesTrustee or
the Holdersholders of at least 25% in principal amount of then outstanding Notes;
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62
(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the CompanyAmkor or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the CompanyAmkor or any of its
Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists,
or is created after the date of the Indentures,Indenture, in an aggregate principal
amount of $10.0$10 million or more, if that default:
(a) is caused by a failure to pay principal of such Indebtedness at
the Stated Maturity thereof (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to the
Stated Maturity thereof;
(6) failure by the CompanyAmkor or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary, to pay final judgments aggregating in excess of $10.0$10 million
(other than amounts covered by insurance), which judgments are not paid,
discharged or stayed for a period of 60 days; and
(7) certain events of bankruptcy or insolvency with respect to the CompanyAmkor
or any of its Significant Subsidiaries, or any group of Subsidiaries that,
taken together, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company,Amkor, any Subsidiary that is a
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holdersholders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
Holders of the Notes may not enforce their respective Indenturesindentures or the
Notes except as provided in the Indentures.Indenture. Subject to certain limitations,
Holdersholders of a majority in principal amount of the then outstanding Notes may
direct athe Trustee in its exercise of any trust or power. AThe Trustee may
withhold from Holdersholders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
The Holdersholders of a majority in aggregate principal amount of the Notes then
outstanding by notice to athe Trustee may on behalf of the Holdersholders of all of the
Notes waive any existing Default or Event of Default and its
36
consequences under the respective IndenturesIndenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Notes.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of the Company with the
intention of avoiding payment of the premium that the Company would have had to
pay if the Company then had elected to redeem the Notes pursuant to the optional
redemption provisions of the Indentures, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the Notes. If an Event of Default occurs at any time (with
respect to the Senior Notes) or prior to May 1, 2004 (with respect to the Senior
Subordinated Notes), by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company to encourage or induce the Holders of the
Notes to accelerate the Notes to be due and payable immediately, then the
premium specified in the respective Indenture shall also become immediately due
and payable to the extent permitted by law upon the acceleration of the Notes.
The CompanyAmkor is required to deliver to the TrusteesTrustee annually a statement regarding
compliance with the Indentures.Indenture. Upon becoming aware of any Default or Event of
Default, the CompanyAmkor is required to deliver to the TrusteesTrustee a statement specifying such
Default or Event of Default.
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63
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the CompanyAmkor or any
Guarantor, as such, shall have any liability for any obligations of the
CompanyAmkor or the
Guarantors under the Notes, the Indentures,Indenture, the Subsidiary Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holderholder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The CompanyAmkor may, at its option and at any time, elect to have all of its
obligations discharged with respect to either or both of the outstanding Senior
Notes and Senior Subordinated Notes and all obligations
of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal
Defeasance"), except for:
(1) the rights of Holdersholders of outstanding Notes to receive payments in
respect of the principal of, premium, if any, and interest and Liquidated
Damages on such Notes when such payments are due from the trust referred to
below;
(2) the Company'sAmkor's obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and the
Company'sAmkor's obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indentures.Indenture.
In addition, the CompanyAmkor may, at its option and at any time, elect to have the
Obligations of the CompanyAmkor and the Guarantors released with respect to certain
covenants that are described in the IndenturesIndenture ("Covenant Defeasance"), and
thereafter any omission to comply with those covenants shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (other than non-payment,nonpayment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Eventsthe caption
"-- Events of Default"Default and Remedies" will no longer constitute an Event of
Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the CompanyAmkor must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holdersholders of the Notes, cash in U.S.United States dollars,
non-callable
Government Securities,noncallable government securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest and Liquidated Damages on the
outstanding Notes onat the stated maturityStated Maturity or on the applicable redemption
date, as the case may be, and the CompanyAmkor must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, the CompanyAmkor shall have delivered to the
Trustee an Opinionopinion of Counselcounsel reasonably acceptable to the Trustee
confirming that (a) the CompanyAmkor has received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of the
Indentures,Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holdersholders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be
37
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
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64
(3) in the case of Covenant Defeasance, the CompanyAmkor shall have delivered to
the Trustee an Opinionopinion of Counselcounsel reasonably acceptable to the Trustee
confirming that the Holdersholders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing either:either (a) on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit); or (b)
or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the Indentures)Indenture) to which the CompanyAmkor or any of
its Restricted Subsidiaries is a partyare parties or by which the CompanyAmkor or any of its
Restricted Subsidiaries isare bound;
(6) the CompanyAmkor must have delivered to the Trustee an opinion of counsel to
the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
(7) the CompanyAmkor must deliver to the Trustee an Officers'Officer's Certificate stating
that the deposit was not made by the CompanyAmkor with the intent of preferring the
Holdersholders of the Notes over the other creditors of the CompanyAmkor with the intent of
defeating, hindering, delaying or defrauding creditors of the CompanyAmkor or others;
(8) the CompanyAmkor must deliver to the Trustee an Officers'Officer's Certificate and an
opinion of counsel, each stating that all conditions precedent relating to
the Legal Defeasance or the Covenant Defeasance have been complied with;
and
(9) release anyexcept as otherwise provided in the Indenture, each Guarantor
shall have been released from any of its Obligations under its Guarantee of
the Notes or the Indentures, except in accordance with the terms of the
Indentures.Notes.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to the exceptions specified in the following paragraphs, the
IndenturesIndenture may be amended with the consent of the Holdersholders of a majority of the
aggregate outstanding principal amount of each of the Senior Notes or the Senior
Subordinated Notes, as applicable, and any Default or
compliance with any provision of the IndenturesIndenture may be waived with the consent of
the Holdersholders of a majority of the aggregate outstanding principal amount of each of the
Senior
Notes or the Senior Subordinated Notes, as applicable.Notes.
Without the consent of each Holderholder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder)nonconsenting holder):
(1) reduce the principal amount of Notes whose Holdersholders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to the covenants described above under the captionscaption
"-- Description of the Senior Notes -- Repurchase at the Option of Holders"
and "-- Description of the Senior Subordinated Notes -- Repurchase at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holdersholders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment defaultPayment Default
that resulted from such acceleration);
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65
(5) make any Note payable in money other than that stated in the
Notes;
38
(6) make any change in the provisions of the IndenturesIndenture relating to
waivers of past Defaults or the rights of Holdersholders of the Notes to receive
payments of principal of or premium, if any, or interest on the Notes;
(7) waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described above
under the captionscaption "-- Description of the Senior Notes -- Repurchase at the Option of Holders"
or "-- Description of the Senior Subordinated Notes -- Repurchase at the
Option of Holders");Holders;" or
(8) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of the Senior
Subordinated Notes Indenture relating to subordination that adversely affects
the rights of the Holders of the Senior Subordinated Notes will require the
consent of the Holders of at least 75% in aggregate principal amount of Senior
Subordinated Notes then outstanding.
Notwithstanding the preceding, without the consent of any Holderholder of the
Notes, the CompanyAmkor and the Trustee may amend or supplement the IndenturesIndenture or the Notes:Notes
to:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company'sAmkor's obligations to Holdersholders of
the Notes in the case of a merger or consolidation or sale of all or
substantially all of the Company'sAmkor's assets;
(4) to make any change that would provide any additional rights or
benefits to the Holdersholders of Notes or that does not adversely affect the
legal rights under the IndenturesIndenture of any such Holder;holder; or
(5) to comply with requirements of the CommissionSEC in order to effect or maintain
the qualification of the IndenturesIndenture under the Trust Indenture Act.Act of 1939.
CONCERNING THE TRUSTEE
If athe Trustee becomes a creditor of the CompanyAmkor or any Guarantor, the Indentures limitIndenture
limits its right to obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as security or otherwise.
Such Trustee will be permitted to engage in other transactions;
however,transactions, but if it
acquires any conflicting interest, it must eliminate such conflict within 90
days, apply to the CommissionSEC for permission to continue or resign.
The Holdersholders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to athe Trustee, subject to
certain exceptions. The Indentures provideIndenture provides that in case an Event of Default
shall occur and be continuing, the TrusteesTrustee will be required, in the exercise of
theirits power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the TrusteesTrustee will be under no obligation to
exercise any of theirits rights or powers under the IndenturesIndenture at the request of any
Holderholder of the Notes, unless such Holderholder shall have offered to the TrusteesTrustee
security and indemnity satisfactory to it against any loss, liability or
expense.
ADDITIONALAVAILABLE INFORMATION
Anyone who receives this prospectus may obtain a copy of the registration
statement and the exhibits to the registration statement, which include the
IndenturesIndenture and
Registration Rights Agreements,Agreement without charge by
60
66 writing to Amkor Technology,
Inc., 1345 Enterprise Drive, West Chester, Pennsylvania 19380, Attention:
Kevin Heron, Esq.Secretary.
GOVERNING LAW
The Indentures provideIndenture provides that theyit and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of laws to the extent that the
application of the law of another jurisdiction would be required thereby.
ENFORCEABILITY OF JUDGMENTS
Since most of the assets of the Company are outside the United States, any
judgments obtained in the United States against the Company, including judgments
with respect to the payment of principal, premium, interest, Liquidated Damages,
Change of Control Payment, offer price, redemption price or other amounts
payable under the Notes, may be not collectible within the United States.
The Company has been informed by its Korean counsel, Kim & Chang, that the
laws of the Republic of Korea permit an action to be brought in a court of
competent jurisdiction in the Republic of Korea (a "Korean Court") on any final
and conclusive judgment in personam of any federal or state court located in the
Borough of Manhattan in The City of New York ("New York Court") that is not
impeachable as void or voidable under the internal laws of the State of New York
for a sum certain in respect of the enforcement of the Indentures or the Notes
provided that (i) such judgment was finally given by the New York Court having
valid jurisdiction, (ii) the defendant against whom such judgment was awarded
received service of process in conformity with the laws of the jurisdiction of
the New York Court rendering judgment otherwise than by publication or responded
to the action without being served with process, (iii) recognition and
enforcement of such judgment is not contrary to public policy of Korea, and (iv)
judgments of the courts of Korea are accorded similar treatment under the laws
of the State of New York.
The Company has been informed by its Philippines counsel, Ortega, Del
Castillo, Bacorro, Odulio, Calma & Carbonell Law Offices, that the Rules of
Court of the Republic of the Philippines and jurisprudence related thereto
permit an action to be brought in a court of competent jurisdiction in the
Republic of the Philippines (a "Philippines Court") on any final and conclusive
judgment in personam of any New York Court that is not impeachable as void or
voidable under the internal laws of the State of New York for a sum certain in
respect of the enforcement of the Indentures or the Notes if (i) the court
rendering such judgment had jurisdiction over the subject matter and the
judgment debtor, as recognized by the Philippines Court (and submission by the
Company in the Indentures to the non-exclusive jurisdiction of the New York
Court will be sufficient for that purpose), (ii) such judgment was not obtained
by want of jurisdiction or lack of notice to any affected party or collusion or
fraud or clear mistake of law or fact and the enforcement thereof would not be
inconsistent with public policy, as these terms are interpreted by a Philippines
Court, (iii) the enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of such foreign revenue, expropriatory or penal laws
and (iv) the action to enforce such judgment is commenced within the applicable
limitation period. Provided conditions (i) through (iv) as set forth above are
satisfied, the Company has been advised by Ortega, Del Castillo, Bacorro,
Odulio, Calma & Carbonell that it knows of no reason, based upon public policy
under the federal laws of the Republic of the Philippines for avoiding
recognition of a judgment of a New York Court to enforce the Indentures or the
Notes.
BOOK-ENTRY, DELIVERY AND FORM AND TRANSFER
The old Notes were initially in the form of one or more registered global
notes without interest coupons (collectively, the "old Global Notes"). Upon
issuance, the old Global Notes were deposited with the Trustee, as custodian for
The Depository Trust Company ("DTC"), in New York, New York, and registered in
the name
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of DTC or its nominee for credit to the accounts of DTC's Direct Participants
and Indirect Participants (as defined below). Beneficial interests in all old
Global Notes and all old Certificated Notes (as defined below), if any, will be
subject to certain restrictions on transfer and will bear a restrictive legend.
See "Risk Factors -- Consequences of Not Tendering Old Notes." In addition,
transfer of beneficial interests in any Global Notes will be subject to the
applicable rules and procedures of DTC and its Direct or Indirect Participants,
which may change from time to time.
The new Notes initially will be in the form of one or more registered global
notes without interest coupons (collectively, the "new Global Notes"). Upon
issuance, the new Global Notes will be deposited with the Trustee as, custodian
for DTC, in New York, New York, and registered in the name of DTC or its nominee
for credit to the accounts of DTC's Direct Participants and Indirect
Participants. Transfer of beneficial interests in new Global Notes will be
subject to the applicable rules and procedures of DTC and its Direct or Indirect
Participants, which may change from time to time.
The old and new Global Notes may be transferred, in whole and not in part,
only to another nominee of DTC or to a successor of DTC or its nominee in
certain limited circumstances. Beneficial interests in the old and new Global
Notes may be exchanged for Notes in certificated form in certain limited
circumstances. See "-- Transfer of Interests in Global Notes for Certificated
Notes."
Initially, the Trustee will act as Paying Agent and Registrar. The Notes may
be presented for registration of transfer and exchange at the offices of the
Registrar.
Depositary Procedures
DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Direct Participants") and to facilitate the clearance and settlement of
transactions in those securities between Direct Participants through electronic
book-entry changes in accounts of Participants. The Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to DTC's system is also available to
other entities that clear through or maintain a direct or indirect, custodial
relationship with a Direct Participant (collectively, the "Indirect
Participants").
DTC has advised the Company that, pursuant to DTC's procedures, DTC will
maintain records of the ownership interests of Direct Participants in the old
and new Global Notes and the transfer of ownership interests by and between
Direct Participants. DTC will not maintain records of the ownership interests
of, or the transfer of ownership interests by and between, Indirect Participants
or other owners of beneficial interests in the old and new Global Notes. Direct
Participants and Indirect Participants must maintain their own records of the
ownership interests of, and the transfer of ownership interests by and between,
Indirect Participants and other owners of beneficial interests in the old and
new Global Notes.
Investors in the old and new Global Notes may hold their interests therein
directly through DTC if they are Direct Participants in DTC or indirectly
through organizations that are Direct Participants in DTC. All ownership
interests in any old or new Global Notes may be subject to the procedures and
requirements of DTC.
The laws of some states in the United States require that certain persons
take physical delivery in definitive, certificated form, of securities that they
own. This may limit or curtail the ability to transfer beneficial interests in
an old or new Global Note to such persons. Because DTC can act only on behalf of
Direct Participants, which in turn act on behalf of Indirect Participants and
others, the ability of a person having a beneficial interest in an old or new
Global Note to pledge such interest to persons or entities that are not Direct
Participants in DTC, or to otherwise take actions in respect of such interests,
may be affected by the lack of physical certificates evidencing such interests.
For certain other restrictions on the transferability of the Notes see
"-- Transfers of Interests in Global Notes for Certificated Notes."
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EXCEPT AS DESCRIBED IN "-- TRANSFERS OF INTERESTS IN GLOBAL NOTES FOR
CERTIFICATED NOTES", OWNERS OF BENEFICIAL INTERESTS IN THE OLD AND NEW GLOBAL
NOTES WILL NOT HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL
DELIVERY OF NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED
OWNERS OR HOLDERS THEREOF UNDER THE INDENTURES FOR ANY PURPOSE OTHER THAN WITH
RESPECT TO THE PAYMENT OF LIQUIDATED DAMAGES.
Under the terms of the Indentures, the Company and the Trustees will treat
the persons in whose names the Notes are registered (including Notes represented
by the old and new Global Notes) as the owners thereof for the purpose of
receiving payments and for any and all other purposes whatsoever. Payments in
respect of the principal, premium, Liquidated Damages, if any, and interest on
old and new Global Notes registered in the name of DTC or its nominee will be
payable by the Trustees to DTC or its nominee as the registered holder under the
Indentures. Consequently, neither the Company, the Trustees nor any agent of the
Company or the Trustees has or will have any responsibility or liability for (i)
any aspect of DTC's records or any Direct Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Notes or for maintaining, supervising or
reviewing any of DTC's records or any Direct Participant's or Indirect
Participant's records relating to the beneficial ownership interests in any
Global Note or (ii) any other matter relating to the actions and practices of
DTC or any of its Direct Participants or Indirect Participants.
DTC has advised the Company that its current payment practice (for payments
of principal, interest and the like) with respect to securities such as the
Notes is to credit the accounts of the relevant Direct Participants with such
payment on the payment date in amounts proportionate to such Direct
Participant's respective ownership interests in the old and new Global Notes as
shown on DTC's records. Payments by Direct Participants and Indirect
Participants to the beneficial owners of the Notes will be governed by standing
instructions and customary practices between them and will not be the
responsibility of DTC, the Trustee or the Company. Neither the Company nor the
Trustees will be liable for any delay by DTC or its Direct Participants or
Indirect Participants in identifying the beneficial owners of the Notes, and the
Company and the Trustees may conclusively rely on and will be protected in
relying on instructions from DTC or its nominee as the registered owner of the
Notes for all purposes.
The old and new Global Notes will trade in DTC's Same-Day Funds Settlement
System and, therefore, transfers between Direct Participants in DTC will be
effected in accordance with DTC's procedures, and will be settled in immediately
available funds. Transfers between Indirect Participants who hold an interest
through a Direct Participant will be effected in accordance with the procedures
of such Direct Participant but generally will settle in immediately available
funds.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Notes only at the direction of one or more Direct
Participants to whose account interests in the old and new Global Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Notes to which such Direct Participant or Direct Participants has or have
given direction. However, if there is an Event of Default under the Notes, DTC
reserves the right to exchange old and new Global Notes (without the direction
of one or more of its Direct Participants) for Notes in certificated form, and
to distribute such certificated forms of Notes to its Direct Participants. See
"-- Transfers of Interests in Global Notes for Certificated Notes."
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the old and new Global Notes among Direct Participants, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company nor the
Trustees shall have any responsibility for the performance by DTC or its Direct
and Indirect Participants of their respective obligations under the rules and
procedures governing any of their operations.
The information in this section concerning DTC and its book-entry systems
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
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Transfers of Interests in Global Notes for Certificated Notes
An entire old or new Global Note may be exchanged for definitive Notes in
registered, certificated form without interest coupons ("Certificated Notes") if
(i) DTC (x) notifies the Company that it is unwilling or unable to continue as
depositary for the old and new Global Notes and the Company thereupon fails to
appoint a successor depositary within 90 days or (y) has ceased to be a clearing
agency registered under the Exchange Act, (ii) the Company, at its option,
notifies the appropriate Trustee in writing that it elects to cause the issuance
of Certificated Notes or (iii) there shall have occurred and be continuing a
Default or an Event of Default with respect to the Notes. In any such case, the
Company will notify the appropriate Trustee in writing that, upon surrender by
the Direct and Indirect Participants of their interest in such Global Note,
Certificated Notes will be issued to each person that such Direct and Indirect
Participants and the DTC identify as being the beneficial owner of the related
Notes.
Beneficial interests in old and new Global Notes held by any Direct or
Indirect Participant may be exchanged for Certificated Notes upon request to
DTC, by such Direct Participant (for itself or on behalf of an Indirect
Participant), to the appropriate Trustee in accordance with customary DTC
procedures. Certificated Notes delivered in exchange for any beneficial interest
in any old or new Global Note will be registered in the names, and issued in any
approved denominations, requested by DTC on behalf of such Direct or Indirect
Participants (in accordance with DTC's customary procedures).
Neither the Company nor the Trustees will be liable for any delay by the
holder of any old or new Global Note or DTC in identifying the beneficial owners
of Notes, and the Company and the Trustees may conclusively rely on, and will be
protected in relying on, instructions from the holder of an old or new Global
Note or DTC for all purposes.
Same Day Settlement and Payment
The Indentures will require that payments in respect of the Notes
represented by the old and new Global Notes (including principal, premium, if
any, and interest and Liquidated Damages, if any) be made by wire transfer of
immediately available same day funds to the accounts specified by the holder of
interests in such old or new Global Note. With respect to Certificated Notes,
the Company will make all payments of principal, premium, Liquidated Damages, if
any, and interest by wire transfer of immediately available same day funds to
the accounts specified by the holders thereof or, if no such account is
specified, by mailing a check to each such holder's registered address. The
Company expects that secondary trading in the Certificated Notes will also be
settled in immediately available funds.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The CompanyWe and the Initial Purchasersinitial purchasers have entered into the Registration Rights
AgreementsAgreement on or prior to May 13, 1999.8, 2003. Pursuant to the Registration Rights
Agreements, the
CompanyAgreement, we agreed to use commercially reasonable efforts to file with the CommissionSEC
the Exchange Offer Registration Statementexchange offer registration statement on the appropriate form under the
Securities Act with respect to the Exchange Notes. Theexchange notes. Pursuant to the exchange
offer registration statement of which this prospectus formsis
39
a part, constitutes such Exchange Offer
Registration Statement. Pursuant to the Exchange Offer Registration Statement of
which this prospectus forms a part, the Company iswe are offering to the Holdersholders of Transfer Restricted Securities
pursuant to the exchange offer who are able to make certain representations the
opportunity to exchange their Transfer Restricted Securities for new Notes. As
described above,exchange notes.
If (1) the terms of new Senior Notes will be identical in all material
respects to those of the old Senior Notes and the terms of the new Senior
Subordinated Notes will be identical in all material respects to those of the
old Senior Subordinated Notes, except that the new Notes will not contain terms
with respect to transfer restrictions, registration rights or payment of
Liquidated Damages. See "Additional Terms of New Notes."
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If (i) the Exchange Offerexchange offer is not permitted by applicable law or CommissionSEC policy
or (ii)(2) any Holderholder of Series A Notes whichthat are Transfer Restricted Securities notifies the Companyus
prior to the 20th business day following the consummation of the Exchange Offerexchange offer
that (a) it is prohibited by law or CommissionSEC policy from participating in the
Exchange Offer,exchange offer, (b) it may not resell the new Notesexchange notes acquired by it in the
Exchange Offerexchange offer to the public without delivering a prospectus, and the prospectus
contained in the Exchange Offerexchange offer Registration Statement is not appropriate or
available for such resales by it, or (c) it is a broker-dealer and holds old Notes
acquired directly from the
Companyus or any of the Company's affiliates, the Companyour Affiliates, we will file with the CommissionSEC a
Shelf Registration Statement to register for public resale the Transfer
Restricted Securities held by any such Holderholder who provides the Companyus with certain
information for inclusion in the Shelf Registration Statement.
For the purposes of the Registration Rights Agreements,Agreement, "Transfer Restricted
Securities" means each Note until:
(1) the date on which such Note has been exchanged by a Person other
than a broker-dealer for an Exchange Noteexchange note in the Exchange Offer;exchange offer;
(2) following the exchange by a broker-dealer in the Exchange Offerexchange offer of
a Note for an Exchange Note,exchange note, the date on which such Exchange Noteexchange note is sold
to a purchaser who receives from such broker-dealer on or prior to the date
of such sale a copy of the prospectus contained in the Exchange Offerexchange offer
Registration Statement;
(3) the date on which such Note has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf
Registration Statement; or
(4) the date on which such Note is distributed to the public pursuant
to Rule 144 under the Securities Act.
The Registration Rights Agreements providesAgreement will provide that:
(1) the Companywe will use commercially reasonable efforts to file an Exchange
Offerexchange
offer Registration Statement with the CommissionSEC on or prior to September 10, 1999;6, 2003;
(2) the Companywe will use commercially reasonable efforts to have the Exchange
Offerexchange
offer Registration Statement declared effective by the CommissionSEC on or prior to
December 9, 1999;5, 2003;
(3) unless the Exchange Offerexchange offer would not be permitted by applicable law
or CommissionSEC policy, the Company willwe will:
(a) commence the Exchange Offer;exchange offer and
(b) use commercially reasonable efforts to issue on or prior to 30
business days, or longer, if required by the federal securities laws,
after the date on which the Exchange Offerexchange offer Registration Statement was
declared effective by the Commission, Exchange NotesSEC, exchange notes in exchange for all Notes
tendered prior thereto in the Exchange Offer;exchange offer; and
(4) if obligated to file the Shelf Registration Statement, the Companywe will use
commercially reasonable efforts to file the Shelf Registration Statement
with the CommissionSEC on or prior to 60 days after such filing obligation arises and
to cause the Shelf Registration to be declared effective by the CommissionSEC on or
prior to 120 days after such obligation arises.
If:
(1) the Company failswe fail to file any of the registration statements required by the
Registration Rights AgreementsAgreement on or before the date specified for such
filing; or
(2) any of such registration statementsstatement is not declared effective by
the CommissionSEC on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"); or
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(3) the Company failswe fail to consummate the Exchange Offerexchange offer within 30 business days
of the Effectiveness Target Date with respect to the Exchange Offerexchange offer
Registration Statement; or
(4) the Shelf Registration Statement or the Exchange Offerexchange offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (1) through (4) above, a
"Registration Default"),
then the Companywe will pay Liquidated Damages to each Holderholder of the Notes, with respect to
the first 90-day period immediately following the occurrence of the first
Registration Default, at a rate equal to 0.25% per annum.annum in principal amount of
Transfer Restricted Securities held by such holder for each week or portion
thereof. The rate of such Liquidated Damages will increase by 0.25% per annum
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages for all
Registration Defaults of 1.00% per annum. If, after the cure of all Registration
Defaults then in effect, there is a subsequent Registration Default, the rate of
Liquidated Damages for such subsequent Registration Default shall initially be
0.25%, regardless of the Liquidated Damages rate in effect with respect to any
prior Registration Default at the time of the cure of such Registration Default.
All accrued Liquidated Damages will be paid by the Companyus on each Damages
Payment Dateinterest payment
date to the Global Note Holderholder of the global securities (as defined below) by wire transfer
of immediately available funds or by federal funds check and to Holdersholders of
Certificated Notescertificated securities (as defined below) by wire transfer to the accounts
specified by them or by mailing checks to their registered addresses if no such
accounts have been specified.
Holders of the Notes will be required to make certain representations to the
Companyus
(as described in the Registration Rights Agreements) in order to participate in
the Exchange Offerexchange offer and will be required to deliver certain information to be
used in connection with the Shelf Registration Statement and to provide comments
on the Shelf Registration Statement within the time periods set forth in the
Registration Rights AgreementsAgreement in order to have their Notes included in the Shelf
Registration Statement and benefit from the provisions regarding Liquidated
Damages set forth above. Holders of the Notes will also be required to suspend
their use of the prospectus included in the Shelf Registration Statement under
certain circumstances upon receipt of written notice to that effect from the Company.us. By
acquiring Transfer Restricted Securities, a Holderholder will be deemed to have agreed
to indemnify the Companyus against certain losses arising out of information furnished by
such Holderholder in writing for inclusion in any Shelf Registration Statement.
Holders of Notes will
also be required to suspend their use of the prospectus included in the Shelf
Registration Statement under certain circumstances upon receipt of written
notice to that effect from the Company.
CONSENT TO JURISDICTION AND SERVICE
The IndenturesIndenture will provide that the CompanyAmkor will irrevocably appoint CT
Corporation System as its agent for service of process in any suit, action or
proceeding with respect to the IndenturesIndenture or the Notes and for actions brought
under federal or state securities laws in any federal or state court located in
the Borough of Manhattan in The City of New York, and submits to such
jurisdiction.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indentures.Indenture. Reference
is made to the IndenturesIndenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided. Cross
references to captionssubcaptions shall mean the respective caption,subcaption, as appropriate,
under the subsections "-- Descriptioncaption "Description of the Senior Notes" and "-- Description
of the Senior Subordinated Notes."
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or
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72
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
41
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more, or an
agreement, obligation or option to purchase 10% or more, of the Voting Stock of
a Person shall be deemed to be control. For purposes of this definition, the
terms "controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Asset Purchase Agreement" means that certain Asset Purchase Agreement
dated as of December 30, 1998, between the CompanyAmkor and ASI, as the same may be
extended or renewed from time to time without alteration of the material terms
thereof.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights (including by way of a sale-and-leaseback) other than sales of
inventory in the ordinary course of business consistent
with past practices; provided(provided that the sale, lease
conveyance or other disposition of all or substantially all of the assets of
the CompanyAmkor and its Restricted Subsidiaries taken as a whole will be governed by
the provisions of the respective IndenturesIndenture described above under the captions "Repurchasecaption
"-- Repurchase at the Option of Holders -- Offer to Repurchase Upon Change
of Control" and/or the provisions described above under the captions "Certaincaption
"-- Certain Covenants -- Merger, Consolidation or Sale of Assets" and not
by the provisions described above under the caption "-- Repurchase at the
Option of theHolders -- Offer to Repurchase by Application of Excess Proceeds
of Asset Sale covenant; andSales");
(2) the issuance of Equity Interests by any of the Company's Restricted
Subsidiaries orwith respect to Amkor, the sale of Equity Interests in any of its
Subsidiaries;
(3) with respect to Amkor's Restricted Subsidiaries, the issuance of
Equity Interests.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that: (a)
involves assets having a fair market value of less than $2.0$2 million; or (b)
results in net proceeds to the CompanyAmkor and its Restricted Subsidiaries of less
than $2.0$2 million;
(2) a transfer of assets between or among the CompanyAmkor and any Restricted
Subsidiary;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
the CompanyAmkor or to another Wholly Owned Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of any Receivable
Program Assets by the CompanyAmkor or any Restricted Subsidiary in connection with a
Receivables Program;
(5) the sale, lease, conveyance or other disposition of any inventory,
receivables or other current assets by the CompanyAmkor or any of its Restricted
Subsidiaries in the ordinary course of business;
(6) the granting of a Permitted Lien;
(7) the licensing by the CompanyAmkor or any Restricted Subsidiary of
intellectual property in the ordinary course of business or on commercially
reasonable terms;
(8) the sale, lease, conveyance or other disposition of obsolete or
worn out equipment or equipment no longer useful in the Company'sAmkor's business; and
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(9) the making or liquidating of any Restricted Payment or Permitted
Investment that is permitted by the covenant described above under the
captions
"Certaincaption "-- Certain Covenants -- Restricted Payments".Payments."
"Attributable Debt" in respect of a sale and leaseback transaction
involving an operating lease means, at the time of determination, the present
value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be
42
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directlydirect and fully guaranteed or insured by the
full faith and credit of the United States government or any agency or
instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than 12 months from
the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of 12 months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding 12 months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million and a Thompson Bank Watch Rating of "B"
or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within six months after the date of acquisition; and
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (5) of this
definition.
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"Change of Control" means the occurrence of any of the following:
(1) the adoption of a plan relating to the liquidation or dissolution
of the
Company;Amkor;
(2) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than a Permitted Holder,holder, becomes the
Beneficial Owner, directly or indirectly, of more than 35% of the Voting
Stock of the Company,Amkor, measured by voting power rather than number of shares, and
such percentage represents more than the aggregate percentage of the Voting
Stock of the
Company,Amkor, measured by voting power rather than number of shares, as
to which any Permitted Holderholder is the Beneficial Owner; or
43
(3) the first date during any consecutive two yeartwo-year period on which a
majority of the members of the Board of Directors of the CompanyAmkor are not
Continuing Directors.
For purposes of this definition, any transfer of an Equity Interest of an
entity that was formed for the purpose of acquiring Voting Stock of the CompanyAmkor will
be deemed to be a transfer of such portion of Voting Stock as corresponds to the
portion of the equity of such entity that has been so transferred.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations), to
the extent that any such expense was deducted in computing such
Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus
(5) non-cash items (other than any non-cash items that will require
cash payments in the future or that relate to foreign currency translation)
decreasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP; minus
(6) non-cash items (other than any non-cash items that will require
cash payments in the future or that relate to foreign currency translation)
increasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business, in each case, on a
consolidated basis and determined in accordance with GAAP.
69
75
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash charges
of, a Restricted Subsidiary of the CompanyAmkor shall be added to Consolidated Net Income
to compute Consolidated Cash Flow of the CompanyAmkor only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to the CompanyAmkor by such Restricted Subsidiary without prior approval (that
has not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations,
44
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments, if
any, pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) interest actually paid by the CompanyAmkor or any Restricted Subsidiary under
any Guarantee of Indebtedness of another Person; plus
(4) the product of all dividend payments, whether or not in cash, on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable
solely in Equity Interests of the CompanyAmkor (other than Disqualified Stock) or to
the CompanyAmkor or a Restricted Subsidiary of the Company.Amkor.
"Consolidated Interest Expense Coverage Ratio" means, with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Consolidated
Interest Expense of such Person for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, Guaranteesguarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the period for which
the Consolidated Interest Expense Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Consolidated
Interest Expense Coverage Ratio is made (the "Calculation Date"), then the
Consolidated Interest Expense Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Consolidated Interest Expense
Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be deemed to have occurred on the first day of
the four-quarter reference period, and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (3) of
the proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(3) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date shall be excluded, but
only 70
76
to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be obligations of the specified Person or any of
its Restricted Subsidiaries following the Calculation Date.
"Consolidated Net Assets" means, with respect to any specified Person as of
any date, the total assets of such Person as of such date less (i)(1) the total
liabilities of such Person as of such date, (ii)(2) the amount of any Disqualified
Stock as of such date, and (iii)(3) any minority interests reflected on the balance
sheet of such Person as of such date.
45
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends
or distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded;
(4) the Net Income (but not loss) of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to the specified Person or one of
its Subsidiaries; and
(5) the cumulative effect of a change in accounting principles shall
be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of the
Indentures;Indenture or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Convertible Notes" means the 5 3/4% Convertible Subordinated Notes due May
1, 2003 issued by the Company pursuant to that certain Indenture dated as of May
6, 1998, between the Company and State Street Bank and Trust Company, as
Trustee, in an aggregate principal amount outstanding not to exceed $207.0
million.
"Credit Facilities" means, with respect to the CompanyAmkor or any Subsidiary, one or
more debt facilities or commercial paper facilities with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means any Senior Debt permitted under the
Indentures the outstanding principal amount of which is, or which provides for
commitments to extend Senior Debt, in the amount of $25.0 million
71
77
or more and that has been designated by the Company as "Designated Senior Debt"
and shall include the Senior Notes.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the CompanyAmkor to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the CompanyAmkor may not
repurchase or redeem any such Capital Stock pursuant to such provisions unless
such repurchase or redemption complies with the covenant described above under
the captions "Certaincaption "-- Certain Covenants -- Restricted Payments."
"Domestic Subsidiary" means a Restricted Subsidiary that is (1) formed
under the laws of the United States of America or a state or territory thereof
or (2) as of the date of determination, treated as a domestic entity or a
partnership or a division of a domestic entity for United StateStates federal income
tax purposes; and, in either case, is not owned, directly or indirectly, by the Company or an
entity that is not described in clausesclause (1) or (2) above.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any offering for cash of common stock of the Company
or options, warrants or rights with respect to its common stock so long as
shares of the common stock of the Company remain listed on a national securities
exchange or quoted on the National Association of Securities Dealers Automated
Quotation System.
"Exchange Notes" means, collectively, the Senior Exchange Notes and the
Senior Subordinated Exchange Notes.46
"Existing Indebtedness" means Indebtedness of the CompanyAmkor and its Restricted
Subsidiaries in existence on the date of the Indentures,Indenture, until such amounts are
repaid.
"Foreign Subsidiary" means a Subsidiary of the CompanyAmkor that is not a Domestic
Subsidiary.
"Foundry Agreement" means that certain Foundry Agreement dated as of
January 1, 1998, among the Company, AEI, CIL,Amkor, our predecessor company (Amkor Electronics, Inc.),
Amkor Technology Limited (f/k/a C.I.L. Limited), ASI and AUSA,Anam USA, Inc., as the
same may be extended or renewed from time to time without alteration of the
material terms thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, through letters of
credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Guarantor" means any future Domestic Subsidiary of the CompanyAmkor formed or
capitalized after the date of the IndenturesIndenture that is a Significant Subsidiary and
that is required by the terms of the IndenturesIndenture to execute a Senior
Subsidiary
Guarantee, or a Senior Subordinated Subsidiary Guarantee, as
applicable, in accordance with the provisions of the respective Indentures,Indenture, and its
successors and assigns.
72
78
"Hedging Obligations" means, with respect to any Person, the Obligations of
such Person under:
(1) swap agreements, cap agreements and collar agreements relating to
interest rates, commodities or currencies;currencies and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates, commodities or currencies.
"holder" means the Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(6) Hedging Obligations,
if and to the extent any of such indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability on a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person measured as the lesser of the fair market value of the
assets of such Person so secured or the amount of such Indebtedness) and, to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person.
The amount of any Indebtedness outstanding as of any date shall be the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount. In addition, the amount of any Indebtedness shall also include
the amount of all Obligations of such Person with respect to the redemption,
repayment or other
47
repurchase of any Disqualified Stock or, with respect to any Restricted
Subsidiary of the Company,Amkor, any preferred stock of such Restricted Subsidiary.
"Intellectual Property Rights Licensing Agreement" means that certain
Intellectual Property Rights Licensing Agreement to be entered into by and
between the CompanyAmkor and ASI in connection with the Asset Purchase Agreement, as the
same may be extended or renewed from time to time without alteration of the
material terms thereof.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the CompanyAmkor or any Restricted Subsidiary of the CompanyAmkor sells or otherwise disposes of
any Equity Interests of any direct or indirect Restricted Subsidiary of the CompanyAmkor
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the CompanyAmkor, Amkor shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the captions "Certaincaption "-- Certain Covenants -- Restricted
Payments."
73
79"Issue Date" means the date on which the Notes are initially issued.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, fixed
or floating charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof; provided that the term "Lien" shall
not include any lease properly classified as an operating lease in accordance
with GAAP.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person and its Restricted Subsidiaries, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends, excluding,
however:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with:with (a) any
Asset Sale;Sale or (b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries;
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss);
(3) any gain or loss relating to foreign currency translation or
exchange; and
(4) any income or loss related to any discontinued operation.
"Net Proceeds" means the aggregate cash proceeds received by the CompanyAmkor or any
of its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof, in each case after
taking into account any available tax credits or deductions and any tax sharing
arrangements and amounts required to be applied to the repayment of
Indebtedness, other than SeniorPermitted Bank Debt, secured by a Lien on the asset or
assets that were the subject of such Asset Sale.
48
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the CompanyAmkor nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any obligation that
would constitute Indebtedness), or (b) is directly or indirectly liable as
a guarantor or otherwise, other than in the form of a Lien on the Equity
Interests of an Unrestricted Subsidiary held by the CompanyAmkor or any Restricted
Subsidiary in favor of any holder of Non-Recourse Debt of such Unrestricted
Subsidiary;
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Notes) of the CompanyAmkor or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the CompanyAmkor or any of its
Restricted Subsidiaries (other than against the Equity Interests of such
Unrestricted Subsidiary, if any).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
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80
"Permitted Bank Debt" means Indebtedness incurred by the CompanyAmkor or any
Restricted Subsidiary other than a Foreign Subsidiary pursuant to the Credit
Facilities, any Receivables Program, or one or more other term loan and/or
revolving credit or commercial paper facilities (including any letter of credit
subfacilities) entered into with commercial banks and/or financial institutions,
and any replacement, extension, renewal, refinancing or refunding thereof.
"Permitted Business" means the business of the CompanyAmkor and its Subsidiaries,
taken as a whole, operated in a manner consistent with past operations, and any
business that is reasonably related thereto or supplements such business or is a
reasonable extension thereof.
"Permitted Holder"holder" means James J. Kim and his estate, spouse, siblings,
ancestors, heirs and lineal descendants, and spouses of any such persons,Persons, the
legal representatives of any of the foregoing, and the trustee of any bona fide
trust of which one or more of the foregoing are the principal beneficiaries or
the grantors or any other Person that is controlled by any of the foregoing.
"Permitted Investments" means:
(1) any Investment in the CompanyAmkor or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by the CompanyAmkor or any Restricted Subsidiary of the CompanyAmkor in a
Person, if as a result of such Investment or in connection with the
transaction pursuant to which such Investment is made:
(a) such Person becomes a Restricted Subsidiary of the Company;Amkor or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the CompanyAmkor or a Restricted Subsidiary of the
Company;Amkor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the captionscaption
"-- Repurchase at the Option of Holders -- Offer to Repurchase by
Application of Excess Proceeds of Asset Sales";Sales;"
(5) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company;Amkor;
(6) any Investment in the TSTC Joint Venture; provided that the aggregate
amount of any such Investment, when taken together with all other
Investments made pursuant to this clause (6), does not exceed $30.0
million;
(7) any Investment in connection with Hedging Obligations;
(8)49
(7) any Investments received (a) in satisfaction of judgments or (b)
as payment on a claim made in connection with any bankruptcy, liquidation,
receivership or other insolvency proceeding;
(9)(8) Investments in (a) prepaid expenses and negotiable instruments
held for collection, (b) accounts receivable arising in the ordinary course
of business (and Investments obtained in exchange or settlement of accounts
receivable for which the CompanyAmkor or any Restricted Subsidiary has determined that
collection is not likely), and (c) lease, utility and worker'sworkers'
compensation, performance and other similar deposits arising in the
ordinary course of business;
(10) any Investment in ASI's Voting Stock pursuant to the general terms of the
commitment letter dated April 9, 1999, between the Company and ASI entered
into in connection with the consummation of ASI's "Workout" program with
certain of its creditors, together with such modifications thereto as shall
be approved by the Board of Directors of the Company; provided that the
aggregate amount of any such
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81
Investment, when taken together with all other Investments made pursuant to
this clause (10), does not exceed $150.0 million; and
(11)(9) any Strategic Investment; provided that the aggregate amount of
all Investments by the CompanyAmkor and any Restricted Subsidiaries in Strategic
Investments shall not exceed $75.0$75 million;
(10) Investments purchased or received in exchange for Permitted
Investments existing as of the Issue Date or made thereafter; provided that
any additional consideration provided by Amkor or any Restricted Subsidiary
in such exchange shall not be permitted pursuant to this clause (10); and
provided, further, that except
with respectsuch purchased or exchanged Investments shall have
a fair market value (as determined by an officer of Amkor unless such fair
market value exceeds $25 million in which case, as determined by Amkor's
Board of Directors) equal to or exceeding the first $25.0 million of StrategicPermitted Investments
made by
the Company, the Company would, at the time of such Strategic Investment
and after giving pro forma effect thereto as if such Strategic Investment
had been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Consolidated Interest Expense Coverage Ratio test set forth in the
first paragraph of the covenants described above under the captions
"Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock";exchanged therefor;
provided that, notwithstanding the preceding, any extension of credit or advance
by the CompanyAmkor or any of its Subsidiaries to a customer or supplier of the
CompanyAmkor or its
Subsidiaries shall not be a Permitted Investment.
"Permitted Junior Securities" means securities (1) that are subordinated to
Senior Debt and any Guarantee in respect thereof, at least to the same extent as
the Notes are subordinated to Senior Debt, and all securities issued in exchange
for, or on account of, Senior Debt or any such Guarantee ("Reorganization Senior
Debt"), (2) that have a final maturity date and Weighted Average Life to
Maturity that is the same or greater than the Notes, (3) that are not subject to
any required principal payment, sinking fund payment or redemption prior to the
last scheduled final maturity date of any Reorganization Senior Debt, and (4)
that are not secured by any collateral.
"Permitted Liens" means:
(1) Liens on the assets of the CompanyAmkor and any Restricted Subsidiary
securing Permitted Bank Debt that was permitted by the terms of the respective
Indenture to be incurred;
(2) Liens on the assets of any Foreign Subsidiary securing
Indebtedness and other Obligations under Indebtedness of such Foreign
Subsidiary that were permitted by the terms of the respective Indenture to be
incurred;
(3) Liens in favor of the CompanyAmkor or any Restricted Subsidiary;
(4) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the CompanyAmkor or any Restricted Subsidiary
of the Company;Amkor; provided that such Liens were not incurred in contemplation of
such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with the CompanyAmkor or the
Restricted Subsidiary;
(5) Liens on property existing at the time of acquisition thereof by
the
CompanyAmkor or any Restricted Subsidiary of the Company,Amkor; provided that such Liens were
not incurred in contemplation of such acquisition;
(6) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(7) Liens to secure Obligations in respect of Indebtedness (including
Capital Lease Obligations) permitted by clause (4) of the second paragraph
of the
covenant entitled "Incurrence"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" covering only the assets acquired with such Indebtedness,
including accessions, additions, parts, attachments, improvements,
fixtures, leasehold improvements or proceeds, if any, related thereto;
(8) Liens existing on the date of the Indentures;this Indenture;
(9) Liens securing Obligations of the CompanyAmkor and/or any Restricted
Subsidiary in respect of any Receivables Program;
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82
(10) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings; provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor;
(11) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens, Liens for master's
50
and crew's wages and other similar Liens, in each case whichthat are incurred in
the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserves or other appropriate provisions,
if any, as shall be required by GAAP shall have been made with respect
thereto;
(12) Liens incurred or pledges and deposits made in the ordinary
course of business in connection with workers' compensation and
unemployment insurance and other types of social security;
(13) Liens to secure any extension, renewal, refinancing or refunding
(or successive extensions, renewals, refinancings or refundings), in whole
or in part, of any Indebtedness secured by Liens referred to in the
foregoing clauses (4), (5), (7) and (8) of this definition; provided that
such Liens do not extend to any other property of the CompanyAmkor or any Restricted
Subsidiary of the CompanyAmkor and the principal amount of the Indebtedness secured by
such Lien is not increased;
(14) judgment Liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings that
may have been initiated for the review of such judgment, decree or order
shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(15) Liens securing obligations of the CompanyAmkor under Hedging Obligations
permitted to be incurred under clause (6)(7) of the second paragraph of
the
covenants entitled "Incurrence"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of
Preferred Stock" or any collateral for the Indebtedness to which such
Hedging Obligations relate;
(16) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
banker's acceptances issued or credited for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or goods;
(17) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(18) Liens arising out of consignment or similar arrangements for the
sale of goods in the ordinary course of business;
(19) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(20) Liens securing other Indebtedness not exceeding $10.0$10 million at
any time outstanding;
(21) Liens securing Permitted Refinancing Indebtedness, provided that
such Liens do not extend to any other property of the CompanyAmkor or any Restricted
Subsidiary of the CompanyAmkor and the principal amount of the Indebtedness secured by
such Lien is not increased; and
(22) Liens on the Equity Interests of Unrestricted Subsidiaries
securing obligations of Unrestricted Subsidiaries not otherwise prohibited
by the Indentures.
77
83Indenture.
"Permitted Refinancing Indebtedness" means any Indebtedness of the CompanyAmkor or any
of its Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the CompanyAmkor or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest or premium
(including any make-whole premium), if any, on, the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
51
provided that if the original maturity date of such Indebtedness is after
the Stated Maturity of the Senior Notes, then such Permitted Refinancing
Indebtedness shall have a maturity at least 180 days after the
Senior Notes;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Senior Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Senior Notes on terms at least as favorable to the Holdersholders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the CompanyAmkor or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, or
government or any agency or political subdivision thereof or any other entity.thereof.
"Qualified Proceeds" means any of the following or any combination of the
following:
(1) any Cash Equivalents;
(2) any liabilities (as would be shown on the Company'sAmkor's or such Restricted
Subsidiary's balance sheet if prepared in accordance with GAAP on the date
of the corresponding Asset Sale), of the CompanyAmkor or any Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases or
indemnifies the CompanyAmkor or such Restricted Subsidiary from further liability;
(3) any securities, notes or other obligations received by the CompanyAmkor or
any such Restricted Subsidiary from such transferee that are converted by
the
CompanyAmkor or such Restricted Subsidiary into cash within 90 days after such
Asset Sale (to the extent of the cash received in that conversion);
(4) long-term assets that are used or useful in a Permitted Business;
and
(5) all or substantially all of the assets of, or a majority of the
Voting Stock of, any Permitted Business;
provided, however, that in the case of clauses (4) and (5) above, the Asset Sale
transaction shall be with a non-Affiliate and the amount of long-term assets or
Voting Stock received in the Asset Sale transaction shall not exceed 10% of the
consideration received.
"Receivables Program" means, with respect to any Person, an agreement or
other arrangement or program providing for the advance of funds to such Person
against the pledge, contribution, sale or other transfer of encumbrances of
Receivables Program Assets of such Person or such Person and/or one or more of
its Subsidiaries.
78
84
"Receivables Program Assets" means all of the following property and
interests in property, including any undivided interest in any pool of any such
property or interests, whether now existing or existing in the future or
hereafter arising or acquired:
(1) accounts;
(2) accounts receivable, general intangibles, instruments, contract
rights, documents and chattel paper (including, without limitation, all
rights to payment created by or arising from sales of goods, leases of
goods, or the rendition of services, no matter how evidenced, whether or
not earned by performance);
(3) all unpaid seller's or lessor's rights (including, without
limitation, rescission, replevin, reclamation and stoppage in transit)
relating to any of the foregoing or arising therefrom;
(4) all rights to any goods or merchandise represented by any of the
foregoing (including, without limitation, returned or repossessed goods);
(5) all reserves and credit balances with respect to any such accounts
receivable or account debtors;
(6) all letters of credit, security or Guarantees of any of the
foregoing;
52
(7) all insurance policies or reports relating to any of the
foregoing;
(8) all collection or deposit accounts relating to any of the
foregoing;
(9) all books and records relating to any of the foregoing;
(10) all instruments, contract rights, chattel paper, documents and
general intangibles relating to any of the foregoing; and
(11) all proceeds of any of the foregoing.
"Receivables Program Debt" means, with respect to any Person, the
unreturned portion of the amount funded by the investors under a Receivables
Program of such Person.
"Registration Rights Agreement" means the Registration Rights Agreement by
and among us and the initial purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Debt" (will appear in the Senior Subordinated Notes Indenture only)
means:
(1) the Senior Notes and all Obligations under the Senior Notes Indenture;
(2) all Indebtedness outstanding under Permitted Bank Debt and all Hedging
Obligations with respect thereto;
(3) any other Indebtedness permitted to be incurred by the Company under the
terms of the Indentures, unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated
in right of payment to the Senior Subordinated Notes; and
(4) any Guarantee by the Company or any Guarantor of any Indebtedness of any
Foreign Subsidiary incurred in compliance with the Indentures;
(5) all Obligations with respect to the items listed in the preceding clauses
(1), (2), (3) and (4).
Notwithstanding anything to the contrary in the preceding, Senior Debt (other
than any Obligations with respect to Permitted Bank Debt) will not include:
(1) any liability for federal, state, local or other taxes owed or owing by the
Company;
(2) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates;
79
85
(3) any trade payables;
(4) the Convertible Notes;
(5) Indebtedness evidenced by the Notes and the Subsidiary Guarantees;
(6) Indebtedness that is expressly subordinate or junior in right of payment to
any other Indebtedness of the Company;
(7) any obligation that by operation of law is subordinate to any general
unsecured obligations of the Company; or
(8) any Indebtedness that is incurred in violation of the Indentures.
"Senior Exchange Notes" means the Company's 9 1/4% Senior Notes due 2006
issued pursuant to the Senior Notes Registration Rights Agreement.
"Senior Notes" means the Company's 9 1/4% Senior Notes due 2006.
"Senior Subordinated Exchange Notes" means the Company's 10 1/2% Senior
Subordinated Notes due 2009 issued pursuant to the Senior Subordinated Notes
Registration Rights Agreement.
"Senior Subordinated Notes" means the Company's 10 1/2% Senior Subordinated
Notes due 2009.
"Senior Subordinated Subsidiary Guarantee" means a Guarantee endorsed on the
Senior Subordinated Notes by a Guarantor.
"Senior Subsidiary Guarantee" means a Guarantee endorsed on the Senior Notes
by a Guarantor.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant toby
the Act,SEC, as such Regulation is in effect on the date hereof assuming that the CompanyAmkor
were the "registrant" for purposes of such definition; provided that in no event
shall a "Significant Subsidiary" include (i) any direct or indirect Subsidiary
of the CompanyAmkor created for the primary purpose of facilitating one or more Receivables
Programs or holding or purchasing inventory, (ii) any non-operating Subsidiary
which does not have any liabilities to Persons other than the CompanyAmkor or its
Subsidiaries, or (iii) any Unrestricted Subsidiary.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Strategic Investment" means any Investment in any Person (other than an
Unrestricted Subsidiary) whose primary business is related, ancillary or
complementary to a Permitted Business, and such Investment is determined in good
faith by the Board of Directors (or senior officers of the CompanyAmkor to whom the Board
of Directors has duly delegated the authority to make such a determination),
whose determination shall be conclusive and evidenced by a resolution, to
promote or significantly benefit the businesses of the CompanyAmkor and its Restricted
Subsidiaries on the date of such Investment; provided that, with respect to any
Strategic Investment or series of related Strategic Investments involving
aggregate consideration in excess of $10.0$10 million, the
CompanyAmkor shall deliver to the
Trustee a resolution of the Board of Directors of the CompanyAmkor set forth in an
Officer's Certificate certifying that such Investment qualifies as a Strategic
Investment pursuant to this definition.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
80
86
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means a Guarantee endorsed on the Notes by a
Guarantor.
53
"Supply Agreement" means that certain Packaging & Test Services Agreement
dated as of January 1, 1998, among the Company, AEI, CIL,Amkor, our predecessor company (Amkor
Electronics, Inc.), Amkor Technology Limited (f/k/a C.I.L. Limited), ASI and
AUSA,Anam USA, Inc., as the same may be extended or renewed from time to time without
alteration of the material terms thereof.
"Total Tangible Assets of the Foreign Subsidiaries" means, as of any date,
the total assets of the Foreign Subsidiaries of the CompanyAmkor as of such date less the
amount of the intangible assets of the Foreign Subsidiaries of the CompanyAmkor as of such
date.
"Transition Services Agreement" means that certain Transition Services
Agreement to be entered into by and between the CompanyAmkor and ASI in connection with the Asset
Purchase Agreement, as the same may be extended or renewed from time to time
without alteration of the material terms thereof.
"TSTC Joint Venture" means the joint venture created by the Shareholders'
Agreement dated as of April 10, 1998, among Acer Incorporated, Taiwan
Semiconductor Manufacturing Company Ltd., Chinfon Semiconductor & Technology
Co., Ltd., Scientek International Investment Co. Ltd., ASI (as successor in
interest to Anam Industrial Co. Ltd.), and the Company, including all amendments
thereof through the date of the Indenture.
"Unrestricted Subsidiary" means any Subsidiary of the CompanyAmkor that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution,resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is a Person with respect to which neither the CompanyAmkor nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(3) has not Guaranteedguaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the CompanyAmkor or any of its Restricted
Subsidiaries; and
(4) has at least one director on its boardBoard of directorsDirectors that is not a
director or executive officer of the CompanyAmkor or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director
or executive officer of the CompanyAmkor or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the CompanyAmkor as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolutionresolution giving effect to such designation and an Officers'Officer's
Certificate certifying that such designation complied with the preceding
conditions and was permitted by the covenant described above under the captions
"Certain"-- Certain Covenants -- Restricted
Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the IndenturesIndenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the CompanyAmkor as of such date and, if such Indebtedness is not permitted
to be incurred as of such date under the covenant described under the captions "Certain"-- Certain Covenants -- Incurrence of
Indebtedness and Issuance of Preferred Stock," the CompanyAmkor shall be in default of such
covenant. The Board of Directors of the CompanyAmkor may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the CompanyAmkor of any outstanding
81
87 Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (1) such Indebtedness
is permitted under the covenant described
under the captions "Certain"-- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;period,
and (2) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
54
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares or similar
shares required by law to be held by third parties) shall at the time be owned
by such Person and/or by one or more Wholly Owned Restricted Subsidiaries of
such Person.
ADDITIONAL TERMS OF THE NEWEXCHANGE NOTES
The terms of the new Senior Notesexchange notes will be identical in all material respects
to those of the old Senior Notes, and the terms of the new Senior Subordinated
Notes will be identical in all material respects to the old Senior Subordinated
Notes,original notes except that the new Notes:exchange notes:
- will have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the old
Notes;original
notes and
- will not be entitled to certain registration rights under the
Registration Rights Agreement, including the provision for Liquidated
Damages of up to 1.00% per annum on the old Notes.original notes.
Holders of old Notesoriginal notes should review the information set forth under
"Prospectus Summary"Risk Factors" and "The Exchange Offer -- Consequences of Failure to Exchange."
55
BOOK-ENTRY; DELIVERY AND FORM
THE GLOBAL SECURITIES
The original notes are, and the exchange notes will be, issued in the form
of one or more global certificates, known as "global securities." The global
securities will be deposited on the date of the acceptance for exchange of the
original notes and the issuance of the exchange notes with, or behalf of, DTC
and registered in the name of Cede & Co., as DTC's nominee.
Exchange Old Notes,notes that are issued as described below under "Issuance of
Certificated Securities" will be issued in the form of registered definitive
certificates, known as "certificated securities." "-- TermsUpon the transfer of
Senior Notes"certificated securities, such certificated securities may, unless the global
securities have previously been exchanged for certificated securities, be
exchanged for an interest in the global securities representing the principal
amount of exchange notes being transferred.
Persons holding interests in the global securities may hold their interests
directly through DTC or indirectly through organizations that are participants
in DTC.
The descriptions of the operations and "-- Termsprocedures of DTC, Euroclear and
Clearstream set forth below are provided solely as a matter of convenience.
These operations and procedures are solely within the control of the respective
settlement systems and are subject to change by them from time to time. Neither
we, the trustee, nor any paying agent or registrar takes any responsibility for
these operations or procedures, and holders of securities are urged to contact
the relevant system or its participants directly to discuss these matters.
DTC has advised us that it is (1) a limited purpose trust company organized
under the laws of the State of New Senior Subordinated Notes.York, (2) a "banking organization" within the
meaning of the New York Banking Law, (3) a member of the Federal Reserve System,
(4) a "clearing corporation" within the meaning of the Uniform Commercial Code,
as amended, and (5) a "clearing agency" registered pursuant to Section 17A of
the Exchange Act. DTC was created to hold securities for its participants and
facilitates the clearance and settlement of securities transactions between
participants through electronic book-entry changes to the accounts of its
participants, thereby eliminating the need for physical transfer and delivery of
certificates. DTC's participants include securities brokers and dealers,
including the initial purchasers, banks and trust companies, clearing
corporations and certain other organizations. Indirect access to DTC's system is
also available to other entities such as banks, brokers, dealers and trust
companies, referred to as "indirect participants," that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. Investors who are not participants may beneficially own securities
held by or on behalf of DTC only through participants or indirect participants.
Ownership of the exchange notes will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by DTC, with
respect to the interests of participants, and the records of participants and
the indirect participants, with respect to the interests of persons other than
participants.
The laws of some jurisdictions may require that some types of purchasers of
exchange notes take physical delivery of the securities in definitive form.
Accordingly, the ability to transfer interests in exchange notes represented by
a global security to these persons may be limited. In addition, because DTC can
act only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants, the ability of a person having an interest
in securities represented by a global security to pledge or transfer the
interest to persons or entities that do not participate in DTC's system, or to
otherwise take actions in respect of the interest, may be affected by the lack
of a physical definitive security in respect of the interest.
So long as DTC or its nominee is the registered owner of a global security,
DTC or such nominee, as the case may be, will be considered the sole owner or
holder of the exchange notes represented by the global security for all purposes
under the indenture. Except as provided below, owners of beneficial interests in
a global security will not be entitled to have securities represented by the
global security registered in their names, will not receive or be entitled to
receive physical delivery of certificated securities, and will not be considered
the owners or holders thereof under the indenture for any purpose, including
with respect to the
56
giving of any direction, instruction or approval to the trustee under the
indenture. Accordingly, each holder owning a beneficial interest in a global
security must rely on the procedures of DTC and, if the holder is not a
participant or an indirect participant, on the procedures of the participant
through which the holder owns its interest, to exercise any rights of a holder
of exchange notes under the indenture or the global security.
We understand that under existing industry practice, in the event that we
request any action of holders of exchange notes, or a holder that is an owner of
a beneficial interest in a global security desires to take any action that DTC,
as the holder of such global security, is entitled to take, DTC would authorize
the participants to take the action and the participants would authorize holders
owning through the participants to take the action or would otherwise act upon
the instruction of the holders. Neither we nor the trustee will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of securities by, DTC, or for maintaining, supervising
or reviewing any records of DTC relating to the exchange notes.
Payments with respect to the principal of, and premium, if any, and
interest on, any exchange notes represented by a global security registered in
the name of DTC or its nominee on the applicable record date will be payable by
the trustee to or at the direction of DTC or its nominee in its capacity as the
registered holder of the global security representing the exchange notes under
the indenture. Under the terms of the indenture, we may treat, and the trustee
may treat, the persons in whose names the exchange notes, including the global
securities, are registered as the owners of the exchange notes for the purpose
of receiving payment on the exchange notes and for any and all other purposes
whatsoever. Accordingly, neither we nor the trustee has or will have any
responsibility or liability for the payment of these amounts to owners of
beneficial interests in the global security, including principal, premium, if
any, and interest. Payments by the participants and the indirect participants to
the owners of beneficial interests in the global securities will be governed by
standing instructions and customary industry practice and will be the
responsibility of the participants or the indirect participants and DTC.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds. Transfers between
participants in Euroclear or Clearstream will be effected in the ordinary way in
accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
securities, cross-market transfers between the participants in DTC, on the one
hand, and Euroclear or Clearstream participants, on the other hand, will be
effected through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in the system in accordance
with the rules and procedures and within the established deadlines (Brussels
time) of the system. Euroclear or Clearstream, as the case may be, will, if the
transaction meets its settlement requirements, deliver instructions to its
respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant global securities in DTC, and
making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Euroclear participants and Clearstream
participants may not deliver instructions directly to the depositaries for
Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a global security from a
participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day, which must be a business day for Euroclear and
Clearstream, immediately following the settlement date of DTC. Cash received in
Euroclear or Clearstream as a result of the sale of an interest in a global
security by or through a Euroclear or Clearstream participant to a participant
in DTC will be received with value on the settlement date of DTC but will be
available in the relevant Euroclear or Clearstream cash account only as of the
business day for Euroclear or Clearstream following DTC's settlement date.
Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the global securities among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and such procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC, Euroclear or
57
Clearstream or their respective participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
ISSUANCE OF CERTIFICATED SECURITIES
If (1) we notify the trustee in writing that DTC, Euroclear or Clearstream
is no longer willing or able to act as a depositary or clearing system for the
exchange notes or DTC ceases to be registered as a clearing agency under the
Exchange Act, and a successor depositary or clearing system is not appointed
within 90 days of this notice or cessation, (2) we, at our option, notify the
trustee in writing that we elect to cause the issuance of exchange notes in
definitive form under the indenture, or (3) upon the occurrence and continuation
of an event of default under the indenture with respect to any series of
exchange notes, then, upon surrender by DTC of the global securities,
certificated securities will be issued to each person that DTC identifies as the
beneficial owner of the exchange notes represented by the global securities.
Upon any such issuance, the trustee is required to register the certificated
securities in the name of the person or persons or the nominee of any of these
persons and cause the same to be delivered to these persons.
Neither we nor the trustee shall be liable for any delay by DTC or any
participant or indirect participant in identifying the beneficial owners of the
related exchange notes and each such person may conclusively rely on, and shall
be protected in relying on, instructions from DTC for all purposes, including
with respect to the registration and delivery, and the respective principal
amounts, of the exchange notes to be issued.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summarydiscussion of the material U.S.United States federal
income tax considerationsconsequences relating to the exchange offersof original notes for exchange
notes in the exchange offer and to the purchase, ownership and disposition of the new Notes. Theexchange
notes. This discussion is based on, as of the federal income
tax consequences set forth below is based upondate hereof, the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
andTreasury Regulations promulgated or proposed thereunder, judicial decisions and
administrative
interpretations thereunder, ascurrent positions of the date hereof, and such authorities may be
repealed, revoked or modified or interpreted differently so as to result in
federal income tax consequences different from those discussed below. We cannot
assure you that the Internal Revenue Service will not successfully challenge onecontained in published revenue
rulings, revenue procedures and announcements, all of which are subject to
change either prospectively or more of the tax consequences described herein, and weretroactively, or are subject to different
interpretations. We have not obtained, nor do we intend to obtain, a ruling from
the IRS or an opinion of counsel with
respectInternal Revenue Service as to the U.S.any United States federal income tax
consequences of acquiring or holding new
notes.discussed below and there can be no assurances that the Internal
Revenue Service will not take contrary positions.
This discussion is limited to U.S. and Non-U.S. Holders who exchange
original notes for exchange notes pursuant to the exchange offer and who hold
the exchange notes as capital assets. This discussion does not purport to deal with all
aspects of U.S.United States federal income taxation that maymight be relevant to
a particular holderholders in light of their particular circumstances, nor does it address the holder's circumstances (for example,tax
consequences to holders subject to special treatment under the United States
federal income tax laws, such as:
- certain financial institutions;
- insurance companies;
- tax-exempt organizations;
- dealers in securities or foreign currencies;
- persons who hold the exchange notes as part of a hedge, conversion
transaction, straddle or other integrated transaction;
- U.S. Holders whose functional currency is not the United States dollar;
- partnerships or other entities classified as partnerships for United
States federal income tax purposes;
- certain former citizens or residents of the United States; and
- persons subject to the alternative minimum tax.
58
This discussion does not address the tax provisionsconsequences arising under the
laws of any foreign, state or local jurisdiction. PROSPECTIVE INVESTORS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL TAX
CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF THE EXCHANGE NOTES, AS WELL
AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN
TAXING JURISDICTION.
As used herein, the term "U.S. Holder" means a beneficial owner of a note
that is for United States federal income tax purposes:
- a citizen or resident of the Code). Also, itUnited States;
- a corporation, or other entity taxable as a corporation for United States
federal income tax purposes, created or organized in or under the laws of
the United States or any political subdivision thereof;
- an estate, the income of which is subject to United States federal income
taxation regardless of its source;
- a trust that either (1) is subject to the supervision of a court within
the United States and has one or more United States persons with
authority to control all substantial decisions or (2) has a valid
election in effect under applicable Treasury Regulations to be treated as
a United States person; or
- not otherwise a U.S. Holder but whose income from a note is effectively
connected with the holder's conduct of a trade or business in the United
States.
As used herein, the term "Non-U.S. Holder" means a beneficial owner of a
note that is not intendeda U.S. Holder for United States federal income tax purposes.
THE EXCHANGE OFFER
An exchange of original notes for exchange notes pursuant to the exchange
offer will not be wholly applicablea taxable event for United States federal income tax purposes.
Consequently, U.S. Holders and Non-U.S. Holders will not recognize any taxable
gain or loss as a result of exchanging original notes for exchange notes
pursuant to all
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88
categories of investors, such as foreign persons, dealers in securities, banks,
insurance companies, tax-exempt organizations, and personsthe exchange offer. The holding new Notes as
part of a hedging or conversion transaction or straddle or persons deemed to
sell new Notes under the constructive sale provisionsperiod of the Code, someexchange notes will
include the holding period of the original notes, and the tax basis in the
exchange notes will be the same as the basis in the original notes immediately
before the exchange.
TAX CONSEQUENCES TO U.S. HOLDERS
TREATMENT OF INTEREST
Interest on an exchange note will be taxable to a U.S. Holder as ordinary
interest income at the time it accrues or is received in accordance with the
U.S. Holder's regular method of accounting for United States federal income tax
purposes.
SALE, EXCHANGE OR RETIREMENT OF EXCHANGE NOTES
In general, upon the sale, exchange, retirement or other taxable
disposition of an exchange note, a U.S. Holder will recognize taxable gain or
loss equal to the difference between:
(1) the amount of cash and the fair market value of other property
received in the sale, exchange, retirement or other taxable disposition
(less any amount attributable to accrued but unpaid interest on the
exchange note not previously included in gross income by the U.S. Holder,
which maywill be taxable as such); and
(2) the U.S. Holder's adjusted tax basis in such exchange note.
Gain or loss recognized by a U.S. Holder on the sale, exchange, retirement
or other taxable disposition of an exchange note generally will be capital gain
or loss. The gain or loss will be long-term capital gain or loss, if
59
the exchange note has been held for more than 12 months. The deductibility of
capital losses is subject to certain limitations.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information returns will be filed with the Internal Revenue Service in
connection with payments on the exchange notes and the proceeds from a sale or
other disposition of the exchange notes. A U.S. Holder will not be subject to special rules.a
28% backup withholding tax on these payments if the U.S. Holder provides its
taxpayer identification number to the paying agent and complies with certain
certification procedures or is otherwise exempt from backup withholding. The
amount of any backup withholding withheld from a payment to a U.S. Holder will
be allowed as a credit against the U.S. Holder's United States federal income
tax liability and may entitle the U.S. Holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
TREATMENT OF INTEREST
Subject to the discussion below concerning backup withholding, payments of
interest on the exchange notes to any Non-U.S. Holder will not be subject to
United States federal income tax, or 30% withholding, provided that:
(1) the interest is premised uponnot effectively connected with the assumptionconduct by the
Non-U.S. Holder of a trade or business in the United States;
(2) the Non-U.S. Holder does not own, actually or constructively, 10%
or more of the combined voting power of all classes of our stock entitled
to vote;
(3) the Non-U.S. Holder is not a controlled foreign corporation
(within the meaning of the Code) that is related, directly or indirectly,
to us through stock ownership; and
(4) either (A) the beneficial owner of an exchange note certifies on
Internal Revenue Service Form W-8BEN, under penalties of perjury, that the
new NotesNon-U.S. Holder is not a United States person or (B) the Non-U.S. Holder
holds its exchange note through certain foreign intermediaries and
old Notessatisfies the certification requirements of applicable United States
Treasury Regulations.
SALE, EXCHANGE OR RETIREMENT OF EXCHANGE NOTES
Subject to the discussion below concerning backup withholding, a Non-U.S.
Holder of an exchange note will not be subject to United States federal income
tax on any gain realized on the sale, exchange, retirement or other taxable
disposition of an exchange note unless (1) the Non-U.S. Holder is an individual
who is present in the United States for 183 days or more during the taxable year
of disposition and certain other conditions are held (or wouldmet or (2) the gain is
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information returns will be heldfiled with the Internal Revenue Service in
connection with payments on the exchange notes and the proceeds from a sale,
exchange, retirement or other taxable disposition of the exchange notes. In
order to avoid information reporting and backup withholding tax requirements, a
Non-U.S. Holder of an exchange note may have to comply with certification
procedures to establish that the Non-U.S. Holder is not a United States person.
The certification procedures required to claim the portfolio interest exemption
described under the heading "Treatment of Interest" generally will satisfy the
certification requirements necessary to avoid the 28% backup withholding tax as
well. The amount of any backup withholding tax withheld from a payment to a
Non-U.S. Holder will be allowed as a credit against the Non-U.S. Holder's United
States federal income tax liability and may entitle the holder to a refund,
provided that the required information is furnished to the Internal Revenue
Service.
60
PLAN OF DISTRIBUTION
Based on interpretations of the SEC staff in no-action letters issued to
third parties, we believe that you may resell or otherwise transfer exchange
notes issued in the exchange offer without further compliance with the
registration and prospectus delivery requirements of the Securities Act if:
- you acquire exchange notes in the ordinary course of your business, and
- you are not engaged in, and do not intend to engage in, and have no
arrangement or understanding with any person to participate in, a
distribution of exchange notes.
We believe that you may not transfer exchange notes issued in the exchange
offer without further compliance with such requirements or an exemption from
such requirements if acquired) as capital assetsyou are:
- our affiliate within the meaning of Section 1221 ofRule 405 under the Code. The
discussion also does not discuss any aspect of state, localSecurities Act, or
foreign law.
EACH HOLDER OR PROSPECTIVE HOLDER OF NEW NOTES IS STRONGLY URGED TO CONSULT
ITS OWN TAX ADVISOR WITH RESPECT TO ITS PARTICULAR TAX SITUATION INCLUDING THE
TAX EFFECT OF ANY STATE, LOCAL, FOREIGN, OR OTHER TAX LAWS AND POSSIBLE CHANGES
IN THE TAX LAWS.
EXCHANGE OF NOTES
The exchange of old Notes for new Notes pursuant to the exchange offers
should not be- a taxable exchange for U.S. federal income tax purposes.
Accordingly, a holder should have the same adjusted issue price, adjusted basis
and holding period in the new Notes as it had in the old Notes immediately
before the exchange.
PLAN OF DISTRIBUTION
Each broker-dealer that holds any old Notes acquired for its own accountoriginal notes as a result of market-making
or other trading activities (a "Participating
Broker-Dealer") mayactivities.
The information described above concerning interpretations of and positions
taken by the SEC staff is not intended to constitute legal advice.
Broker-dealers should consult their own legal advisors with respect to these
matters.
If you wish to exchange old Notesyour original notes for new Notes. Each Participating
Broker-Dealer receiving new Notesexchange notes in the
exchange offer, you will be required to make representations to us as described
in "The Exchange Offer -- Procedures for Tendering" and "-- Your Representations
to Us" of this prospectus and in the letter of transmittal. In addition, if a
broker-dealer receives exchange notes for its own account in connection with the
exchange offers mustfor
original notes that were acquired by it as a result of market-making activities
or other trading activities, it will be required to acknowledge that it will
deliver a prospectus in connection with any resale by it of such new Notes. Participating Broker-Dealersexchange notes.
A broker-dealer may use this prospectus, during the period referred to belowas we may amend or supplement it, in
connection with resales of the
new Notes received in exchange for old Notes if such old Notes were acquired by
such Participating Broker-Dealers for their own accounts.these resales. We have agreed that, this
prospectus may be used by a Participating Broker-Dealer in connection with
resales of such new Notes for a period endingof 180 days
after the effectiveclosing date of the registration statement (subjectexchange offer, we will make this prospectus, as
amended or supplemented, available to extension under certain limited
circumstances described herein) or, if earlier, when allany broker-dealer for use in connection
with any such new Notes have
been disposed of by such Participating Broker-Dealer. See "The Exchange
Offer -- Terms of the Exchange Offer."resale.
We will not receive any cash proceeds from the issuanceany sale of the new Notes
offeredexchange notes by
this prospectus. Newbroker-dealers. Exchange notes received by Participating Broker-Dealersbroker-dealers for their own accountsaccount
in connection with the exchange offersoffer may be sold from time to time in one or more transactionstransactions:
- in the over-the-counter market,
- in negotiated transactions,
- through the writing of options on the new Notesexchange notes, or
- a combination of such methods of resale,resale.
The prices at which these sales occur may be:
- at market prices prevailing at the time of resale,
- at prices related to such prevailing market prices, or
- at negotiated prices.
Any such resale of the new Notes may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any new Notes.such exchange
notes. Any Participating Broker-Dealerbroker-dealer that resells new Notesexchange notes that wereit received by it for its
own account in the exchange offersoffer and any broker or dealer that participates in
a distribution of such new Notesexchange notes may be deemed to be an "underwriter"underwriter within the
meaning of the Securities Act. Any profit on any such resale of new Notesexchange notes and
any commissionscommission or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act.compensation. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
Participating Broker-Dealerbroker-dealer will not be deemed to admit that it is an "underwriter"underwriter within the
meaning of the Securities Act.
61
LEGAL MATTERS
Our counsel, Wilson Sonsini Goodrich & Rosati, Palo Alto, California will
issue a legal opinion regarding the legalityThe validity of the new Notes and certain other
matters. Our Korean counsel, Kim & Chang, has advised us
83
89
regarding the matters set forth under the caption "Description of
Notes -- Enforceability of Judgements", and our Philippines counsel, Ortega, Del
Castillo, Bacorro, Odulio, Calma & Carbonell Law Offices, has advised us as to
the matters set forth under the caption "Description of Notes -- Enforceability
of Judgements".exchange notes being offered hereby will be passed upon
for Amkor Technology, Inc. by Perkins Coie LLP, Menlo Park, California.
EXPERTS
The audited consolidated financial statements of Amkor Technology, Inc. and
its subsidiaries as of December 31, 19972002 and 1998, and for each of the years in the
three-year period ended December 31, 1998, included in our annual report on Form
10-K incorporated by reference in this prospectus and elsewhere in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as set forth in their report dated February 10, 1999 (except
with respect to the Company's proposed investment in ASI pursuant to the
financial restructuring of ASI discussed in Note 14, as to which the date is
March 29, 1999) and is included herein in reliance upon the authority of said
firm as experts in giving said report. In that report, that firm states that
with respect to the investment in ASI its opinion is based on the report of
other independent public accountants, namely Samil Accounting Corporation.
The consolidated financial statements of ASI as of December 31, 1996 and
1997,2001 and for each of the three
years in the period ended December 31, 1997,
prepared2002, incorporated in accordance with generally accepted accounting principles in Korea,this Prospectus by
reference to the annual report on Form 10-K/A have been audited by
Samil Accounting Corporation, independent accountants,
except as they relate to Anam Engineering & Construction Co., Ltd. ("AEC"),
audited by Chong Un & Company, independent accountants, and Anam USA Inc.,
audited by Sianna, Carr & O'Connor,PricewaterhouseCoopers LLP, independent accountants, as indicated in their
report with respect thereto. PricewaterhouseCoopers LLP did not audit the
financial statements of Amkor Technology Philippines, Inc. (formerly Amkor
Technology (P1/P2), Inc., which subsequently merged with Amkor Technology
Philippines (P3/P4), Inc. and Anam/Amkor Precision Machine Company
(Philippines), Inc. with Amkor Technology (P1/P2), Inc. as the investmentsurviving
entity), a wholly owned subsidiary, referred to as ATP, which financial
statements reflect total assets of 14% and 17% and operating expenses of 14%,
18% and 17% of the related consolidated totals as of December 31, 2002 and 2001
and for the each of the three years in Amkor/Anam Pilipinas, Inc.the period ended December 31, 2002. The
financial statements of ATP for 2002 were audited by SyCip Gorres Velayo & Co.,
independent accountants.a member practice of Ernst & Young Global, whose report thereon dated January
15, 2003 has been furnished to PricewaterhouseCoopers LLP. Such ASI financial
statements are incorporated in this
Prospectus by reference to our Annual Report on Form 10-K for the year ended
December 31, 1998have been so included in reliance on the reportreports of such independent
accountants given on the authority of such firms as experts in auditing and
accounting.
The report regarding AEC includes an explanatory paragraph with respect to the
ability of AEC to continue as a going concern and the report regarding ASI
includes an explanatory paragraph regarding changes in accounting principles,
the impact of the Korean economic situation on ASI and the ability of ASI to
continue as a going concern.
Thecombined financial statements of the Kwangju Packaging Business (K4) of ASIAmkor Technology Philippines (P1/P2),
Inc. and Amkor Technology Philippines (P3/P4), Inc. as of December 31, 1997 and 1998,2001 and
for each of the threetwo years in the period ended December 31, 1998, prepared2001 were audited by
Andersen Worldwide (through its then Philippine member firm, SyCip Gorres Velayo
& Co.), who prior to cessation of its operations in accordance with generally accepted accounting
principlesAugust 2002 had expressed an
unqualified opinion on those financial statements in its report dated March 19,
2002.
With the cessation of its operations, Andersen Worldwide can no longer
consent to the use of its audit report in, or participate in the United States, incorporated in this Prospectus by reference to
our Current Report on Form 8-K dated on April 21, 1999, have been so
incorporated in reliance on the report of Samil Accounting Corporation,
independent accountants, given on the authority of said firm in auditing and
accounting.
The consolidated financial statements of ASI as of December 31, 1997 and
1998, and for eachpreparation of,
the three yearsregistration statement of which this prospectus is a part. Accordingly, your
ability to seek damages from Andersen Worldwide in the period ended December 31, 1998,
prepared in accordance with generally accepted accounting principles in the
United States, have been audited by Samil Accounting Corporation, independent
accountants, except as they relate to Anam Engineering & Construction Co., Ltd.
("AEC"), audited by Ahn Kwon & Co., independent accountants, and Anam USA Inc.,
audited by Sianna, Carr & O'Connor, LLP, independent accountants. Such ASI
financial statements are incorporated in this Prospectus by reference to our
Current Report on Form 8-K/A dated December 7, 1999 -- in reliance on the
reports of such independent accountants given on the authority of said firms as
experts in auditing and accounting. The report regarding ASI includes an
explanatory paragraphconnection with the respect to the Korean economic situation, the
Workout Program and revenues from Amkor. The report regarding AEC includes and
explanatory paragraph with respect to AEC's ability to continue as a going
concern and its voluntary petition in bankruptcy. The report regarding Anam USA,
Inc. includes an explanatory paragraph with respect to ASI's Workout Program.
84exchange
offer will be limited.
62
90
- -----------------------------------------------------------------------------------------------------------------------------------------
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE EXCHANGE
OFFER, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY AMKOR TECHNOLOGY, INC. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT
RELATES OR AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF AMKOR TECHNOLOGY, INC. SINCE THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
PAGE
----
Forward-Looking Information............. 1
Where You Can Find More Information..... 1
Prospectus Summary...................... 3
Amkor Technology........................ 3
Summary of the Exchange Offer........... 4
The Exchange Agent...................... 7
The Exchange Notes...................... 7
Risk Factors............................ 9
Private Placement....................... 11
Use of Proceeds......................... 12
Ratio of Earnings to Fixed Charges...... 12
Capitalization.......................... 13
The Exchange Offer...................... 14
Description of the Notes................ 22
Book-Entry; Delivery and Form........... 56
United States Federal Income Tax
Considerations........................ 58
Plan of Distribution.................... 61
Legal Matters........................... 62
Experts................................. 62
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AMKOR TECHNOLOGY, INC.
---------------------
OFFER TO EXCHANGE ALL OUTSTANDING 9 1/4%ITS
7.75% SENIOR NOTES DUE MAY 1, 2006
FOR 9 1/4% SENIOR NOTES DUE MAY 1, 2006,
WHICH2013
THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED
FOR ANY AND ALL OF ITS OUTSTANDING
10 1/2%7.75% SENIOR SUBORDINATED NOTES DUE MAY 1, 2009,
FOR 10 1/2% SENIOR SUBORDINATED NOTES DUE MAY 1, 2009,
WHICH HAVE BEEN REGISTERED2013
THAT WERE ISSUED AND SOLD IN A TRANSACTION
EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AMKOR TECHNOLOGY, INC.AS AMENDED
-------------------------
PROSPECTUS
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell or
buy any Notes in any jurisdiction where it is unlawful. The information in this
prospectus is current as of December-------------------------
, 1999.
- --------------------------------------------------------------------------------2003
---------------------------------------------------------
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91
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law permitsprovides that a
corporation to
includemay indemnify directors and officers as well as other employees and
individuals against expenses including attorneys' fees, judgments, fines and
amounts paid in its charter documents,settlement in connection with various actions, suits or
proceedings, whether civil, criminal, administrative or investigative, other
than an action by or in the right of the corporation, a derivative action, if
they acted in good faith and in agreements betweena manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, its directorswith respect to any
criminal action or proceeding, if they had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses including
attorneys' fees incurred in connection with the defense or settlement of such
actions, and officers, provisions expanding the scopestatute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification beyond that specifically providedmay be granted by the current law. The Company's Amended and
Restateda corporation's by-laws, disinterested
director vote, stockholder vote, agreement or otherwise.
Our Certificate of Incorporation provides for the indemnification of
directors to the fullest extent permissible under Delaware law. The Company'sOur Bylaws
provide for the indemnification of officers, directors and third parties acting
on behalf of the CompanyAmkor if such person acted in good faith and in a manner reasonably
believed to be in and not opposed to the best interest of the
Company,Amkor, and with
respect to any criminal action or proceeding, the indemnified party had no
reason to believe his conduct was unlawful. The Company hasWe have entered into indemnification
agreements with itsour directors and executive officers, in addition to
indemnification provided for in the Company'sour Bylaws, and intendsintend to enter into
indemnification agreements with any new directors and executive officers in the
future. Our certificate of incorporation also provides that we shall pay the
expenses incurred in defending any such proceeding in advance of its final
disposition, subject to the provisions of the Delaware General Corporation Law.
Such rights are not exclusive of any other right which any person may have or
thereafter acquire under any statute, provision of the certificate, by-law,
agreement, vote of stockholders or disinterested directors or otherwise. No
repeal or modification of such provision will in any way diminish or adversely
affect the rights of any director, officer, employee or agent of us thereunder
in respect of any occurrence or matter arising before any such repeal or
modification.
The Delaware General Corporation Law permits a corporation to provide in
its certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for:
- any breach of the director's duty of loyalty to the corporation or its
stockholders,
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
- payments of unlawful dividends or unlawful stock repurchases or
redemptions, or
- any transaction from which the director derived an improper personal
benefit.
Our certificate of incorporation provides that none of our directors will
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except, if required by the Delaware General
Corporation Law as amended from time to time, for liability
- for any breach of the director's duty of loyalty to us or our
stockholders,
- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
II-1
- under Section 174 of the Delaware General Corporation Law, which concerns
unlawful payments of dividends, stock purchases or redemptions, or
- for any transaction from which the director derived an improper personal
benefit.
Neither the amendment nor repeal of such provision will eliminate or reduce
the effect of such provision in respect of any matter occurring, or any cause of
action, suit or claim that, but for such provision, would accrue or arise,
before such amendment or repeal.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Senior Notes Indenture dated as of May 6, 1999 between the
Registrant and State Street Bank and Trust Company,
including form of 9 1/4% Senior Note Due 2006.*
4.2 Senior Subordinated Notes Indenture dated as of May 6, 1999
between the Registrant and State Street Bank and Trust
Company, including form of 10 1/2% Senior Subordinated Note
Due 2009.*
4.3 Senior Notes Registration Rights Agreement dated as of May
13, 1999 among the Registrant and the Initial Purchasers.*
4.4 Senior Subordinated Notes Registration Right Agreement dated
as of May 13, 1999 among the Registrant and the Initial
Purchasers.*
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.**
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Samil Accounting Corporation.
23.3 Consent of SyCip Gorres Velayo & Co.
23.4 Consent of Siana Carr & O'Connor, LLP.
23.5 Consent of Wilson Sonsini Goodrich & Rosati (included in
Exhibit 5.1).
23.6 Consent of Kim & Chang.**
23.7 Consent of Ortega, Del Castillo, Bacorro, Odulio, Colma &
Carbonell.**
23.8 Consent of Ahn Kwon & Co.
24.1 Power of Attorney (Included on page II-6).
25.1 Statement of Eligibility of Trustee.**
99.1 Form of Letter of Transmittal with respect to Exchange
Offer.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
- -------------------------
* Incorporated by referenceExhibits
Reference is made to the Company's Quarterly ReportExhibit Index on Form 10-Q
filed May 17, 1999 (File No. 000-29472).
** Incorporated by reference to the Company's Registration Statement on Form S-4
filed August 31, 1999 (File No. 333-86199).
(b) Financial Statement Schedules
II-1
92
Schedules not listed above have been omitted because the information to be
set forth therein is not applicable or is shown in the financial statements or
Notes thereto.page E-1.
ITEM 22. UNDERTAKING
1. WeUNDERTAKINGS
The undersigned registrant hereby undertakeundertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Securities Act"), each filing of ourthe registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)Act),
that is incorporated by reference in the registration statementthis Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
2. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, we havethe registrant
has been advised that in the opinion of the SECSecurities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than ourthe payment by the registrant of expenses
incurred or paid by one of our directors, officersa director, officer or controlling personsperson of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, wethe registrant will, unless in the opinion of ourits counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by usit is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
3. WeThe undersigned registrant hereby undertakeundertakes to respond to requests for
information that is incorporated by reference into thisthe prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of thisthe registration statement through the
date of responding to the request.
4. WeThe undersigned registrant hereby undertakeundertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in thisthe registration statement when it became effective.
II-2
93
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we havethe registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-4 and has duly caused this registration statementRegistration
Statement to be signed on ourits behalf by the undersigned, thereunto duly
authorized, in the City of West Chester, State of Pennsylvania, on December 7, 1999.the 9th day
of July, 2003.
AMKOR TECHNOLOGY, INC.
By: /s/ JAMES J. KIM
------------------------------------
Name: James J. Kim
Title: Chairman and Chief Executive
Officer
(Principal Executive Officer)
II-3
94POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
James J. Kim and Kenneth T. Joyce and each of them, his true and lawful
attorneys in fact and agents with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments), any registration
statement relating to the same offering as this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b), and any and all additions
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys in fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys in fact
and agents or his substitute or substitutes may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on December 7,
1999 in the
capacities indicated.indicated below on July 9, 2003.
SIGNATURE TITLE
--------- -----
*
/s/ JAMES J. KIM Chairman and Chief Executive Officer
and Chairman
- ---------------------------------------------------------------------------------------------------------- (Principal Executive Officer)
James J. Kim
*/s/ JOHN N. BORUCH President and Director
- ----------------------------------------------------------------------------------------------------------
John N. Boruch
/s/ KENNETH T. JOYCE Chief Financial Officer (Principal Financial
---------------------------------------------------------- and
- ------------------------------------------------ Accounting Officer)
Kenneth T. Joyce
*/s/ WINSTON J. CHURCHILL Director
- ----------------------------------------------------------------------------------------------------------
Winston J. Churchill
*/s/ THOMAS D. GEORGE Director
- ----------------------------------------------------------------------------------------------------------
Thomas D. George
*/s/ GREGORY K. HINCKLEY Director
- ------------------------------------------------
Gregory K. Hinckley
*----------------------------------------------------------
Gregory K. Hinckley
II-3
SIGNATURE TITLE
--------- -----
/s/ JOHN B. NEFF Director
- ----------------------------------------------------------------------------------------------------------
John B. Neff
*By: /s/ KENNETH JOYCE
- ------------------------------------------------
Kenneth Joyce
Attorney-in-factJUERGEN KNORR Director
----------------------------------------------------------
Juergen Knorr
/s/ JAMES W. ZUG Director
----------------------------------------------------------
James W. Zug
II-4
95
AMKOR TECHNOLOGY, INC.
REGISTRATION STATEMENT ON FORM S-4EXHIBIT INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.11.1 Purchase Agreement, dated May 1, 2003, related to $425
million 7.75% Senior Notes due 2013 (incorporated by
reference from Amkor's quarterly report on Form 10-Q for the
quarter ended March 31, 2003).
4.1 Indenture, dated as of May 6, 19998, 2003, between Amkor
Technology, Inc. and U.S. Bank National Association
(incorporated by reference from Amkor's quarterly report on
Form 10-Q for the Registrant and State Street Bank and Trust Company,
including form of 9 1/4% Senior Note Due 2006.*quarter ended March 31, 2003).
4.2 Senior Subordinated Notes Indenture dated as of May 6, 1999
between the Registrant and State Street Bank and Trust
Company, including form of 10 1/2% Senior Subordinated Note
Due 2009.*
4.3 Senior Notes Registration Rights Agreement, dated as of May 13, 1999 among the Registrant8, 2003,
between Amkor Technology, Inc. and the Initial Purchasers.*
4.4 Senior Subordinated Notes Registration Right Agreement dated
asCitigroup Global Markets
Inc., Deutsche Bank Securities, Inc. and J.P. Morgan
Securities, Inc.
4.3 Form of May 13, 1999 among the Registrant and the Initial
Purchasers.*7.75% Exchange Note due 2013
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.**Perkins Coie LLP as to legality of the Exchange
Notes issued by Amkor Technology, Inc.
8.1 Opinion of Perkins Coie LLP, special tax counsel, as to
certain federal income tax matters
12.1 Computation of ratio of earnings to fixed charges
(incorporated by reference from Amkor's quarterly report on
Form 10-Q for the quarter ended March 31, 2003).
23.1 Consent of Arthur Andersen LLP.PricewaterhouseCoopers LLP
23.2 Consent of Samil Accounting Corporation.SyCip Gorres Velayo & Co., a member practice of
Ernst & Young Global
23.3 Consent of SyCip Gorres Velayo & Co., a member firm of
Arthur Andersen(1)
23.4 Consent of Siana Carr & O'Connor, LLP.Samil Accounting Corporation
23.5 Consent of Wilson Sonsini Goodrich & RosatiPerkins Coie LLP (included in Exhibit 5.1).
23.6 Consent of Kim & Chang.**
23.7 Consent of Ortega, Del Castillo, Bacorro, Odulio, Colma &
Carbonell.**
23.8 Consent of Ahn Kwon & Co.5.1 and
Exhibit 8.1)
24.1 Power of Attorney (Included(contained on the signature page II-6).hereto)
25.1 Form T-1 Statement of Eligibility of Trustee.**U.S. Bank National
Association to act as trustee under the Indenture
99.1 Form of Letter of Transmittal
with respect to Exchange
Offer.**
99.2 Form of Notice of Guaranteed Delivery.**Delivery
99.3 Form of Exchange Agent Agreement.**Letter to DTC Participants
99.4 Form of Letter to Clients
- -------------------------
* IncorporatedAll schedules are omitted because they are inapplicable or the requested
information is shown in the consolidated financial statements of the registrant
or related notes thereto.
(1) The financial statements of Amkor Technology Philippines (P1/P2), Inc. and
Amkor Technology Philippines (P3/P4), Inc., consolidated subsidiaries of the
Registrant, for each of the two years in the period ended December 31, 2002,
have been audited by the independent public accountants SyCip Gorres Velayo
& Co., a member firm of Arthur Andersen, (referred to herein as Arthur
Worldwide). However, the Registrant has been unable to obtain the written
consent of Arthur Worldwide with respect to the incorporation by reference
to the Company's Quarterly Report on Form 10-Q
filed May 17, 1999 (File No. 000-29472).
** Incorporated by reference to the Company'sof such financial statements in this Registration StatementStatements on Form S-4
filed August 31, 1999 (File No. 333-86199)(the "Registration Statement"). Therefore, the Registrant has dispensed with
the requirement to file the written consent of Arthur Andersen in reliance
on Rule 437a under the Securities Act of 1933, as amended. As a result, you
may not be able to recover damages from Arthur Worldwide under Section 11 of
the Securities Act of 1933, as amended, for any untrue statements of
material fact or any omissions to state a material fact, if any, contained
in the financial statements of the Registrant for the aforementioned
financial statements, which are incorporated by reference in the
Registration Statement.
E-1